Rio Tinto sees big potential for MNCs

China's rapid economic growth in recent years has fostered an open and diverse environment with massive business opportunities for multinational corporations, amid further opening-up and industrial reform, a top company executive said.

"Over the past few years, the Chinese market has undergone rapid growth and transformation, and its commitment to further open up its market, advance innovations, and shift toward high-quality development has fostered world-leading industries while creating opportunities for foreign businesses like Rio Tinto," said Alf Barrios, chief commercial officer of Rio Tinto, the world's largest iron ore firm.

"The mining industry plays a crucial role as an enabler of the energy transition. The strong demand for high-quality minerals in China, Rio Tinto's largest market that accounts for over half of its revenue, has generated substantial opportunities for investment and trade," Barrios said.

"China's economy, up by 5 percent in the first half of this year, demonstrates economic resilience despite ongoing challenges. We believe the government's efforts in advancing high-quality development will generate sustained demand for minerals essential for the energy transition and present opportunities for multinational companies to deepen their strategic partnerships with China."

According to Barrios, China's manufacturing sector is strong with energy transition at the heart of its growth. This transition has accounted for nearly a third of Chinese GDP growth in 2023 with strong growth in the first half of 2024, he said.

China continues to be one of the fastest-growing major economies, a driving force for the global economy and the world's top consumer and producer of metals, while its focus on innovation, green technologies, and digitalization positions it well for future growth. Investments in these areas are likely to drive productivity and economic advancement, he said.

China continues to be a key market for global mining giants in the iron ore sector, thanks to its vast market size, with major players eager to forge new partnerships in an increasingly green-oriented world, said Zhao Xiangbin, chief strategist at Beijing Gold and Forex Fortune Investment Management.

"As the trend toward decarbonization accelerates, the steel industry will gradually transition from high-growth to high-quality development, a shift that will create greater growth opportunities for companies like Rio Tinto," Zhao said.

Historically, Rio Tinto's collaboration with China has focused on supplying iron ore to Chinese steel companies, but there has also been an increase in cooperation in the low-carbon sector, said the company.

"Moreover, China's expanding global influence in areas such as new energy vehicles and renewable energy will drive demand for higher-quality imports of copper, aluminum and other materials," he said.

Around 60 percent of new solar and renewables capacities are installed in China and nearly two-thirds of global EV production and sales are in the country. Last year, China surpassed Japan to become the world's top auto exporter.

In response to the increasing demand for mineral products in China, Rio Tinto has committed to increasing its investments and strengthening partnerships with Chinese counterparts in the coming years.

Over the years, Rio Tinto has focused on extending its partnership with China, collaborating with partners, including Aluminum Corp of China (Chinalco) and China Baowu Steel Group Corp, to jointly develop the world's largest undeveloped high-grade iron ore deposits in Simandou, Guinea, which will provide essential raw material for the future of green steel once operational, said Barrios.