Resource World Magazine

32 www.resourceworld.com d e c e m b e r / j a n u a r y 2 0 1 6 INvESTmENT P remier Christy Clark recently returned to British Columbia from China where she led a trade mission to foster closer ties with Canada's western province. Topics of interest included China's growing need for alternative energy, clean technology solutions, culture and other sectors. Ivy Chong, President and CEO/CFO of dynasty Gold Corp. [DYG-TSXV; D5G-FSE], was among the delegates accom- panying the premier. Her particular interest was meeting with Chinese business people and investors interested in investing in min- ing projects in British Columbia. In an interview, Chong discussed the economic slowdown in China. "China was growing at a double-digit annual rate for a decade before the 2008 financial crisis," she said. "Since then, growth slowed to 8% annually. Last year, it was below 8%. In the first half of this year, it was fur- ther reduced to around 7%. However, the Chinese government is confident that for the rest of this year, it will not be less than 6.5%. Notwithstanding, China is still the leading economic engine in the world. India took over China's growth rate last year but China's GDP is still five times India's GDP." Chong continued, "Although imports and exports are significantly reduced since last year, China is still the largest import and export country in the world. Speaking to local media, government officials and business people, their view is that it's not realistic to expect China to continue to grow at a rapid pace without any pause or adjust- ment considering that the economic base is already four times what it was in the 1990s. Their goal is to transition from being a low value manufacturer to a high value exporter such as exporting technology in high speed railway construction, high tech equipment and industrial services. I see the Chinese following in the footsteps of devel- oped countries in redefining its industrial role in the world." Chong remarked that the government announced the 13th five-year plan since the Communist Party took power in 1949. The plan includes infrastructure invest- ments, medical care, education reform and a second-child policy. "Ninety million couples are in the age group that could potentially have another child," she said. "This is equivalent to creating a British Columbia every year for many years." "The five-year plan will create demand for metals, raw materials and consumer products," said Chong. "I see huge potential for any company that wants to participate in China's growth. But China needs to improve its legal system to protect foreign investments. It is not an overnight endeavour; it takes time and encourage- ment to embark on a structural reform." Chong explained that the economic slowdown is relatively modest if one compares it to the exponential growth for the last two decades. In the long-term, China continues to grow at a realistic and sustainable rate. "In my view, Canadian companies should not fear the slowdown in China, but competition from other resource-rich countries such as Australia. Australia is aggressively pursuing and feeding Chinese resource demand." To energize the economy, the Chinese government has lowered interest rates at least four times this year and eased reserves required in bank lending. The local media reports the central government will possibly allow a higher ratio of debt to gross domestic product. China's debt to GPD ratio is 56%, much lower than 100% in the US and 250% in Japan. "Premier Li Keqiang recently said the government should have a proactive fiscal policy, increase tax breaks and speed up infra- structure spending," Chong said. The National Development Reform Committee (NDRC) has approved invest- ments in multiple infrastructure projects, including building a high-speed railway connecting rural areas to cities and towns in the southern and west-central parts of China. "These areas are still considered undeveloped and primitive compared to coastal cities," Chong said. "When 1.5 bil- lion people are connected and can move freely, that is a huge business opportunity. The total value of these infrastructure projects is worth hundreds of billions of dollars." Chinese investors seeking Canadian mining projects by Ellsworth Dickson Left to right, Ivy Chong, President, CEO and CFO of Dynasty Gold, Premier Christy Clark of British Columbia, and Larry Kornze, VP of Exploration and Director of Dynasty Gold. Photo submitted.

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