Interview: "I still see China as our No. 1 customer," Western Australia premier

The Australian state of Western Australia (WA) has witnessed a fall in economic growth since the decline of the decade-long mining and resource boom, but the state 's leader is still confident in a strong growth.

"I'm sure China will continue to experience strong growth, and if that's 7 percent instead of 12 percent, 7 percent on a big Chinese economy is still a huge demand for national resources," WA Premier Colin Barnett said.

"It's a quieter period now... We've seen the effect of falls in prices and demand, but I expect that'll be a normal cyclical event, " he said in a recent interview Xinhua for the Talk to China series.

Australian economists agree, saying at 7 percent GDP growth, - that was announced in July - the Chinese economy is still adding more in dollar terms than it was ten years ago, raising living standards as the economy transforms to a consumer-led focus.

Barnett said the main influence to the WA economy has been the fall in prices of key commodities, particularly iron ore, oil and natural gas, however it needs to be carefully examined.

WA exports of iron ore to China have grown from 80 million tonnes per year to 550 million tonnes per year in a decade, Barnett said.

"So enormous growth in the iron ore industry here as a result of China's demand," Barnett said. "Now I expect that's leveling off now, but it's gone to a huge level."

Barnett said it was not just iron ore that has grown, but exports of the state's other natural resources due to China's demand.

"We will have trebled our liquefied natural gas (LNG) production to the extent that by the end of the decade we will probably exceed the Gulf state of Qatar," Barnett said.

"The really spectacular growth may be behind us, but I still see China as our number one customer, a major investor [in Western Australia]."

"I expect however more Chinese investment into LNG so that China can have access to gas supply on its east coast in particular, [helping] China in its efforts to clean up carbon emissions and to clean up the atmosphere in China around major cities."

Crucially though, Barnett is expecting larger amounts of Chinese investment into agriculture and food production following the signing of the China-Australia Free Trade Agreement.

According to professional services firm Deloitte, Australia's agribusiness is one of the five leading sectors that have the potential to take over from mining as a key driver of growth in the Australian economy over time.

The Western Australian government has spent over 300 million Australian dollars (222 million U.S. dollars) expanding irrigation channels and raising dam heights for increased water holdings for agriculture.

"I think it's interesting that probably the most famous irrigation project in Australia is the Ord River scheme in the north of Western Australia," Barnett said.

"The interesting thing is that a Chinese private company has won the right to develop the agricultural land [around the project] ."

Barnett said this example of bilateral cooperation around the Ord River shows the door is open for Chinese investment into Australia's agriculture, food production and food processing sectors.

According to him, Western Australia's location, vast natural resources and stable political and economic environment make it competitive with Australia's other states for international investment.

Barnett said the state's natural resources and 12,500 km coastline give the state an advantage when it comes to international investment.

"We're on the Indian Ocean side [of Australia], so we've got a growing relationship with India and Africa," Barnett said. "And of course, Perth is in the same time zone as the major cities of Asia, including China."

"So I think location, natural resources, stable political and economic environment are our advantages."

Since the decline of the Australian mining and resource boom and the slowing Chinese economy, WA has taken a hit in resources based revenues.

However, this evolution is not new and part of a normal cyclical event, Barnett said, adding, "Western Australia as a mining based economy is used to cycles." Endi