His solution was to charter a Qantas 737 and fly more than 40 investors and his sales team 3,500 kilometres across the country to Melbourne where inner-city prices are more than 25 per cent cheaper. “They paid their own fare,” said Gilmore, managing director of MLG Realty.” If they bought, they had the fare refunded. Most of them bought.”
While sustained economic growth in China has lifted hundreds of millions of Chinese out of poverty, for many West Australians like Gilmore and his clients, the returns have been even more lucrative. On just one of the three flights he has organised so far this year, his investors bought 112 Melbourne properties worth 85 million Australian dollars, or about $70 million, he said.
Other than the closely linked satellites of Hong Kong and Taiwan, few economies are profiting more from the rise of China than this arid, western third of Australia that is home to just over 2 million people. Australia’s biggest state has become a vital supplier of the resources that China needs to feed its manufacturing industries and support rapid urbanisation. Iron ore is the backbone of this trade and Western Australia now supplies 40 percent of China’s imports.
“The one big driver has been the growth of the iron ore industry based on the consumption of steel in China,” said Darryl Harris, chairman of Australian-listed miner, Indo Mines. Exports, mostly of resources, to China have increased 340 per cent since 2003 to 13.8 billion Australian dollars for the year to July, according to state-government statistics. Western Australia now accounts for 60 per cent of all Australian exports to China.
Underscoring the state’s importance for China, President Hu Jintao made Perth his first stop on a visit to Australia for the APEC leaders’ summit in Sydney. Other senior Chinese leaders, including Premier Wen Jiabao, Vice Premier Zeng Peiyan and National People’s Congress Chairman Wu Bangguo, have also visited Western Australia in recent years to tour outback mines and inspect potential investments for Chinese companies.
At least 12 Chinese steel mills and other businesses have taken stakes in local iron ore mines or downstream processing facilities, according to the state government. While there are fears in China that the economy could overheat, threatening growth, some mining experts have predicted that demand for raw materials is likely to accelerate.
In a recent report, two Australian National University researchers, Ross Garnaut and Song Ligang, forecast that China’s hunger for resources could continue increasing for two decades as incomes and domestic consumption rise.
However, mining experts warn that infrastructure bottlenecks and labour shortages could threaten future growth in Western Australia.
IHT