Monday 26 Sep 2022 | 03:17 | SYDNEY
Monday 26 Sep 2022 | 03:17 | SYDNEY

Australian resources in China: Where do they go?

23 November 2010 09:38

Catherine Chan is an environmental lawyer and journalist in Beijing.

For all the talk on how the Australian resources sector relies on China's insatiable appetite for Australia's rocks, little has been written about where these commodities end up. Much of this economic growth has been attributed to China's property boom – or bubble, as many investors suspect it might be.

The boom has seen the construction of a plethora of high-rises that reflect modern China's consumer and lifestyle preferences. International Wealth Wonderland, Prosperity Centre, Wealth Mansions, Global Trade Mansions, 'Home of the Elites' – the naming conventions for new residential buildings in Beijing betray the Chinese consumer's aspirations.

Beijing's well-heeled residents live in these fantastically named compounds littered throughout the city. Overwrought faux baroque buildings are buttressed by gaudy gilt plasterboard columns. The most expensive residential compounds in town come replete with plastic-bronze statues of gladiators (and sometimes chariots; photo by the author).

The property market is so hotly competitive that novel marketing methods have been employed in a desperate attempt to capture increasingly jaded consumers. It's not uncommon to see touts walking the lengths of the traffic jam that is Beijing's Third Ring Road – one of the main arterial roads circling the city – handing out flyers advertising the latest luxury development. Trapped commuters accept in-car sales as another part of big city life.

In 2009, just under 40% of China's steel demand went towards construction. Australia's iron ore, used in steel production, as well as its high-quality coking coal, plays a supporting role in this industrial growth — a trend towards using large blast furnaces for steel-making in China will see the demand for coking coal grow further.

But the terrible inferno that killed at least 53 people in one of Shanghai's towering office blocks recently has shifted local and global attention to building safety standards. Acrid smoke has been hanging around downtown Shanghai for days, says a friend who can see the burnt-out shell from her office. 'If I had any time to get out of work and be in the open, the air would probably kill me.'

Perhaps the most famous and symbolic conflagration of China's property boom occurred while the rest of the world was in the grip of the GFC in February 2009. Raucous Chinese New Year celebrations are never complete without a car full of black-market fireworks. An enthusiast let some off at the then-new China Central Television tower and within four hours the neighbouring building, the just completed Mandarin Oriental Hotel, had burnt to a crisp. One fire-fighter was killed.

But like safety standards in the mining industry, whether or not anything is done to remedy the ills that beset the construction industry remains to be seen. This much is certain: in the immediate future, steel will still need to be forged, and coal will still need to be burned.