China’s economic growth to flatten at 6-7 per cent: Rio Tinto CEO

With the news that China has overhauled Japan to become the world's second largest economy still fresh in everyone's mind, now comes a surprise from Rio Tinto Group chief executive officer Tom Albanese, who predicts that China's sizzling hot run in terms of economic growth will soon begin to flatten – perhaps to as low as 6 per cent – in this decade itself. But this growth rate, he points out in a speech delivered today in Shanghai, is still fairly ''robust''.

So far, China has enjoyed a remarkable bull-run in economic growth, averaging 10 per cent per annum over a 30-year period. Overhauling Japan this year it is set to overtake the USA by 2027.

 ''We should temper our forecasts with the thought that nothing is forever,'' Albanese says in his speech, excerpts of which were made available to the media. ''China's growth rates, as amazing as they are, are bound to flatten,'' he adds.

China is Rio's biggest customer, purchasing $10.7 billion of raw materials, principally iron ore.

''We can expect to see a lower GDP growth rate over the next decade; perhaps a decline to levels of 6-7 per cent in the coming 10 years compared to around 9 per cent in 2010,'' Albanese said. ''This is still robust compared to mature economies and still represents very large absolute levels of growth.''

With the Chinese government restraining credit off-take the economy has begun to cool this year.  Economic expansion was reported at 10.3 per cent for the second quarter, lower than the 11.9 per cent in the first.

Rio is the second-biggest exporter of iron ore in the world while China remains the world's largest buyer of ore.