From The West Australian:
WA’s mining boom is not over because China’s high demand for iron ore is still growing, the head of an Australian chamber of commerce in Shanghai says.
…Mr [Peter] Arkell told _The West Australian _he was disappointed with the perception in Australia that the mining boom was over. “We are selling more iron ore here year on year,” he said. “Last month’s was far greater than the month before.”
…”To feed a population, you don’t need more than 10 per cent of the population doing rural activities. But in China, it’s just under 50 per cent (doing rural work),” he said.
“These are unproductive, not contributing much to the GDP of the nation. It’s very important for the economy to get to the point where the rural workforce is also 10 per cent, and get the other 30-40 per cent into the cities doing something more productive.”
The UN sees Chinese urbanistion at 60% by 2030 and 70% by 2050. These are slowing trends not accelerating. Economics 101 tells you the rest:
- in growth what matters is rate of change not the aggregate amount;
- China can keep building new stuff but so long as it is less than last year (and once past halfway that’s very likely) then the contribution of investment to growth will automatically fall and so will steel output;
- you can capture market share but who cares if prices fall faster still;
- the rise of scrap will accelerate the process.
The boom is over. Neh, the boom is bust.
