Fortescue’s Andrew Forrest talks up China growth

In his first trip back to China, Andrew Forrest met with officials to stress ‘our massive submarine deal’ is for peaceful defence only and spoke out against fears Australia was at risk of invasion.

Andrew Forrest said China’s reopening its investment in advanced manufacturing and renewable energy would drive its economic growth. Picture: Martin Ollman

China’s economic growth as it came out of its Covid-19 lockdown is one of the bright spots in an uncertain world, Fortescue Metals chief executive Andrew Forrest says.

In an interview from the Boao Forum on China’s Hainan Island, during his first trip back to China since 2019, Dr Forrest said China’s reopening from Covid-19, its investment in advanced manufacturing and renewable energy were factors that would drive its economic growth in the future.

He said there had been continued uncertainty about global markets among Westerners, reflected in the Credit Suisse conference in Hong Kong last week where he was a keynote speaker.

Dr Forrest also said it had been important to get the message across that Australia’s $360bn investment in nuclear-powered submarines was for defensive purposes and would not be used to attack China.

“In meetings with Chinese officials, I have made it really clear that there should not be military animosity between Australia and China.

“There isn’t a snowflake’s chance in hell that China would invade Australia,” he said.

“Our massive investment in submarines is for peaceful defence purposes only and will not be used to attack another country.”

He said the mood in China, where he has been for the past week, was upbeat, with its increase in economic activity having potential to further advantage the Australian economy.

“We are not seeing (that uncertainty) here,” he said. “We’re seeing everyone relieved that the Covid lockdowns are over and just getting on with things,” he said.

China’s economic recovery this year was a “huge opportunity for Australia” as a supplier of raw materials to the country.

China's economic recovery this year was a “huge opportunity for Australia”, Dr Forrest said. Photographer: Qilai Shen/Bloomberg

While the Chinese economy is officially predicted to grow at about 5 per cent this year, after weak growth in 2021 and 2022 as a result of Covid-19 lockdowns, Dr Forrest said the benefit to the Australian economy from its recovery would be much more significant. “Our own opportunity will leave 5 per cent (growth rate) in the dust,” he said.

Beijing was investing heavily in renewable energy because of its concern about global warming and the environment even as it was forced to step up its use of coal-fired power in the short term.

“They are increasing their coal-fired power capacity, but they are only doing it because they don’t have a choice,” Dr Forrest said.

“But there is also a deep concern about global warming in China, which is why they have been the largest investor in renewable energy in the world. The current leadership in China plans to strongly accelerate it.”

Dr Forrest’s comments came as Australian business leaders are returning to China after a break of several years due to Covid-19.

Forrest’s Fortescue has been a long-time sponsor of the annual Boao forum, which was suspended for in-person meetings for the past few years.

The forum will see the first visit to China in recent years by a federal minister with the attendance of Assistant Trade Minister Tim Ayres.

The forum is also being attended by Treasury Wine Estate chief executive Tim Ford, Austrade chief executive Xavier Simonet, education company IDP chief executive Tennealle O’Shannessy, and the Australian ambassador to China, Graham Fletcher.