The cargo ship Shoei Kisen Kaisha Mineral Shikoku, certain for Tianjin, China, loaded with iron ore at the ship’s loading dock at Fortescue Metals Group’s wharf in Port Hedland, Pilbara region, Western Australia.
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BO’AO, China – China’s reopening post-pandemic will increase demand for goods greater than it did when the country emerged from the 2008 financial crisis, says Andrew Forrest, Executive Chairman Fortescue.
The Australian iron ore giant began operations in China with a shipment of 180,000 tonnes of iron ore in 2008, in line with the company’s website.
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At the time, China was in a position to avoid a chronic recession due to a large stimulus program that supported infrastructure development – which boosted demand for goods.
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“It’s, but it surely’s just going to be more volume this time around,” Forrest told CNBC on Wednesday when asked how the demand in post-Covid China might compare.
“Probably about the same or just a little less in percentage terms,” Boao Forum for Asia said on the sidelines. Government leaders and businessmen attend the prestigious conference held annually in Hainan Province and sometimes in comparison with the Asian version of the World Economic Forum’s annual event in Davos, Switzerland.
We’re currently seeing uniform demand across China.
Andrzej Forrest
executive chairman, Fortescue
China’s economy is far larger today than it was during the 2008 global financial crisis. In 2010, China overtook Japan to grow to be the second largest economy in the world.
Forrest identified that the percentage volume is bigger when the “cake” is larger.
“What we’re seeing now’s uniform demand across China,” said Forrest, “and uniform demand but growing, fortunately, in the supply chain, the ecosystem that will create [for the] the renewable energy industry.
Forrest didn’t specify what goods he was referring to. In the six months ended December 31, Fortescue said it shipped a record 96.9 million tons of iron ore, up 4% from a 12 months ago.
The Australian miner expects to take care of an analogous pace of shipments in the first half of this 12 months, in line with guidance shared in February.
This 12 months’s Boao Forum is the first since China ended Covid-era border controls, allowing more foreign corporations to go to the country.
Renewable energy: huge demand
Forrest told CNBC on Wednesday that one of the big changes during the pandemic was the acceleration of global warming. The second, he said, is to speed up China’s technological development, especially in the field of automation.
He added that the renewable energy ecosystem – encompassing manufacturing, automation and robotics – is currently “the most enjoyable investment sector in the world”.
“The demand is completely huge,” he said.
China has the “most advanced” technology in the industry, Forrest said, citing his travels through greater than 70 countries during the pandemic.
Fortescue announced a goal of net zero operating emissions by 2040. The corporate said in February that it had unused capital commitments of $1 billion to Fortescue Future Industries, its subsidiary launched in 2020 to develop renewable energy projects.
More specifically, Forrest said that “wind is a bit overinvested” but there may be a necessity for solar energy production worldwide. He added that there are more ways to attract energy from tap water.
He said Fortescue will be doing joint ventures with Chinese corporations and is working with Hunan and two other Chinese provinces, declining further details.
“So we encourage Chinese corporations to attach with Western corporations to take a position abroad with Western corporations, to cooperate, to crack, to bring technology and know-how,” he said.
“There are huge business opportunities in North America and Europe, Australia and Asia for Chinese corporations to introduce their technology.”