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Rio Tinto CEO says demand to grow

Updated: 2014-05-29 07:42
By Du Juan ( China Daily)

Increasingly, foreign companies are spending in China. They can be driven by lower costs or goodwill. They all seek mutual benefit.

In the past four years, Rio Tinto spent $5 billion on Chinese equipment and services.

Walsh said the company will continue to buy in China. That's based on Rio Tinto's active purchasing team of more than 50.

"China's manufacturing is always there. While others think that there's a long way to go, I believe in many ways, China has proved its capability in manufacturing," Walsh said.

During the China Development Forum in Beijing during late March, Walsh spoke on China's manufacturing.

He said running a modern mining business is like running a massive factory, with a global supply chain, advanced technology and production line.

"The majority of Rio Tinto's customers are manufacturers which depend on us for a secure supply of raw materials," he said. "We depend on the health of the manufacturing sector to drive demand for our products. We also depend on them for equipment, technology, and management techniques."

"These drive our business, helping us to keep costs down, by operating as efficiently and productively as possible."

Ten years ago Rio Tinto bought almost nothing from China. Trade was in one direction.. That's changed dramatically. Goods from truck bodies and rail cars to accommodation units and ship loaders bought from China are being used in Rio Tinto's operations around the world.

"This rapid growth in procurement reflects the growth in quality and sophistication of the Chinese manufacturing sector," said Walsh.

Premier Li Keqiang met leaders of foreign companies on March 24. At the meeting, Walsh was the first CEO to ask questions. He said that was because China has a long friendship history with Rio Tinto and the company's size, its scale of business in China. It has done it for more than 30 years.

Rio Tinto CEO says demand to grow Rio Tinto CEO says demand to grow
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