No short cuts in rebuilding, says Rio boss
"The strength of the resources boom has masked the weakness of a slowdown in productivity improvements," he warned at a business luncheon on Friday.
"Australia now needs to rebuild competitiveness and productivity."
Mr du Plessis called for co-operation across all levels of government to achieve the necessary reform. "I am afraid ... there are no short cuts," he said, while praising the new federal government.
"I must admit, I like what I see," he said after visiting Canberra this week for meetings.
The Rio chairman said Australia had moved from being the miner's lowest-cost operations to the highest, while conceding much of this shift was due to the movement of the currency.
The "great divergence" that saw China left behind as Europe developed during the industrial revolution "has become the great convergence, with the East rapidly regaining ground", he said.
During the 1990s, China's industrialisation contributed to the long period of strong economic growth in Europe and North America, he said, without fuelling inflation.
"Increasingly, the wellbeing of the global economy depends on Asia in general and on China in particular," he said.
"The good news is that China's economy continues to grow and between July and September, GDP rose by 7.8 per cent [and] signs of a consumption-led economy are beginning to emerge.
"Beijing is steering its economy through a major transformation - towards growth eventually being led more by domestic consumption than exports and investment ... reform will gain momentum."
Mr du Plessis also warned Europe has seen little improvement in its underlying "fundamental economic imbalances ... [making] it difficult to reach sustainable solutions over the long-term".
Frequently Asked Questions about this Article…
Rio Tinto's chairman, Jan du Plessis, is optimistic about China's shift towards a consumption-led economy. He believes this transformation will help sustain global economic growth as China moves away from relying heavily on exports and investment.
Jan du Plessis highlighted that Australia needs to rebuild its competitiveness and productivity. He pointed out that the resources boom has masked a slowdown in productivity improvements, and emphasized the need for cooperation across all levels of government to achieve necessary reforms.
According to Jan du Plessis, rebuilding Australia's economy requires comprehensive reforms and cooperation across government levels. He stressed that there are no shortcuts to achieving the necessary improvements in competitiveness and productivity.
Rio Tinto's chairman stated that the wellbeing of the global economy increasingly depends on Asia, particularly China. He noted that China's economy continues to grow, with signs of a consumption-led economy emerging, which is crucial for global economic stability.
Jan du Plessis mentioned that Australia has transitioned from having the lowest-cost mining operations to the highest. He attributed much of this shift to currency movements, impacting the country's competitiveness in the mining sector.
Jan du Plessis warned of 'bad and lazy habits' that have developed in Australia due to economic stagnation in Europe. These habits have contributed to a slowdown in productivity improvements, which needs to be addressed to rebuild competitiveness.
The 'great convergence' refers to the rapid economic growth in the East, particularly China, which is regaining ground after being left behind during the industrial revolution in Europe. This convergence is seen as a positive development for global economic balance.
Jan du Plessis expressed concern about Europe's lack of improvement in addressing fundamental economic imbalances. He warned that these issues make it challenging to achieve sustainable long-term solutions for the region's economy.
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