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SYDNEY: The head of the world's largest miner said he was cautious over the strength of the global recovery, as restocking slowed in China and demand in developed nations remained sluggish.
BHP Billiton chief executive Marius Kloppers said strong commodity exports had underpinned a world-beating performance by Australia's economy during the worst global downturn since the Great Depression.
But he warned that the bounce-back had been slower than expected in advanced nations and the transformation of China's economy would be a complex and unprecedented process that should not be taken for granted.
"We've seen that the economic rationale for continued growth is compelling, but there are other forces at work in this global economy," Kloppers said in an address late Wednesday.
"There's still a lot of hardship out there and I think that on balance we've seen the world come out of this recession a little bit more slowly than we've seen in other events," he added.
"We remain relatively cautious in the short and medium term."
Kloppers said growth in China had fuelled a one-off spike in demand, but "we are now witnessing the end of that working capital build".
Similar restocking had been expected in the advanced economies, but Kloppers said it had been slow to start and remained fairly lethargic.
However, the mining chief said he was confident about Australia's prospects in the longer term as Asia boomed, with China expected to build 50,000 skyscrapers in the next 20 years.
He said foreign direct investment would be essential to meeting steep demand, which was likely to place Australia's labour market under pressure.
"While clearly not simple ... both Australia and Australian companies are going to need to be open to this kind of investment despite its immediate and strategic implications," said Kloppers.
China was Australia's third-largest investor last year, behind the United States and Britain. It accounted for 49 of the 153 deals involving Asian investors, spending 6.78 billion US dollars, mostly in mining acquisitions.
Two-way business hit 74 billion dollars (67.7 billion US) last year and averaged 22.5 per cent growth over the past five years, putting China on course to outstrip Japan as Australia's top trading partner.
- AFP/so
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