Zhou Zhongshu: To scientifically tap and make use of mineral resources is a key measure for the sustainable development of China’s economy.

Since the 21st century, China’s consumption of bulk metal and mineral resources has continued to rise. It is increasingly imperative for China to build up a system to guarantee the supply of mineral resources, especially those minerals in short supply. However, tapping and exploiting the resources in a scientific way is key to ensuring sustainable development in China.

During the course of tapping mineral resources, it is essential to pursue the green development goals of "intensive development, recycled application, environment protection and natural coordination." Facts have proved that mankind has to rely on scientific and technological progress to solve the mineral shortage problem and tension between supply and demand.

The major challenge we are facing is that on the one hand we must rely on scientific and technological progress to save resources, and on the other hand, we should make full use of minerals of low quality, ultra fine grains and ores with intergrowth difficulty and mining and washing complications. We should also take steps now to protect the environment from pollution that would only need to be cleaned up at a later stage.

What is your outlook for the commodities market as you evaluate China’s future growth?

Zhou Zhongshu: High consumption of mineral resources is a big challenge in the course of China’s economic development.

Since the end of the past century, China’s economy has been developing on a large scale and the country has entered a period of rapid growth with the manufacturing industry at the core - at the expense of high raw materials consumption. From 1978 to 2004, annual GDP growth in China was above nine per cent. In 2004, the country’s total GDP growth exceeded US$ 1,000 billion.

For a long time to come, China will rely on the manufacturing industry to promote speedy economic development during the course of industrialization, which will not only be a general characteristic of China’s industrialization but also an inevitable choice for China in its response to globalization. At present, China is the world’s largest consumer of many types of metals. It has been the world’s biggest iron ore importer for quite a few years and is the largest consumer of steel products.

Just how important are mergers & acquisitions for the global growth strategy of Chinese firms?

Zhou Zhongshu: The strategy of global cooperation and development of mineral resources is an imperative choice for China in response to economic globalization.

Natural resources are usually characterized by limited distribution and uneven spread. No country in the world can meet its demands with its own mineral resources. Nor can any country depend solely on its own resources to complete the course of industrialization.

A strategy of global acquisitions in resources has been a successful experience of developed countries. And it will also be an inevitable way for developing countries to realize industrialization, against the backdrop of economic globalization. To make full use of the strategic opportunity in the coming 20 years and actively seek cooperation in tapping global mineral resources, is the only choice for China in order to pursue a new road of industrialization and build up a moderately prosperous society in an all-round way.

Are you considering further acquisitions and where is your attention focused?

Zhou Zhongshu: Resources and brand names will be the major areas for China to make acquisitions and mergers overseas.

China is in relatively short supply of mineral resources, and the discrepancy between the supply and demand has been exacerbated as the country has become a manufacturing centre of the world.

The resources market is one of the major fields that China should make acquisitions and mergers overseas. Meanwhile, to acquire famous brands is one of the key areas that China should focus on in carrying out the strategy of "going out".

At present, the tolls on China’s export products and the proportion of "labeling brands" on commodities are too large. To acquire famous brands overseas can help increase sales profits abroad and make direct use of international marketing networks of well-known brands.

Therefore resources and famous brands are the two key areas that Chinese enterprises should focus on.