Australian resources minister bets on India and China trips

Rapid urbanisation and a rising middle class will push India to fill the global gap as China’s economic growth slows, Australian Resources Minister Josh Frydenberg said.

The Australia economy is battling a global slump in commodity prices as China – its biggest market – slows and the minister believes that India is an opportunity.

“(India) haven’t gone through the urbanisation and development that China has but under the Modi government they’re very intent on following that path,” the minister was quoted as saying by Australian media.

Earlier, in an article published in the Weekend Australian newspaper, Frydenberg called India a “fascinating story.”

“With nearly 1.3 billion people, its per capita steel consumption is 27 per cent of the global average and just a fraction of that of China. In 2014 China’s steel consumption was 530 kg a person, whereas India’s was just 60 kg,” he wrote.

“With plans to triple domestic steel production by 2025, the Modi government is preparing India for rapid urbanisation and domestic growth. This creates great opportunities for Australia to not only export iron ore to India but to supply China whose large-scale integrated steel mills are increasingly exporting to emerging new markets, including Vietnam and India,” he said.

Frydenberg said in the first half of 2015, Chinese steel exports were up 27 per cent with a 70 per cent ­increase to Vietnam and a 62 per cent rise to India. It is this focus in China on the steel export market that has led in part to China buying a record 96.3 million tonnes of iron ore last month. Prices may be down, but volumes are up.

“Of all the major resource ­exporting countries, Australia is best placed to capi­talise on future demand. We are viewed as a reli­able, high-quality supplier that is highly innovative, efficient and proximate to key markets,” he wrote.

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