THE influence on Australia of the massive industrial and economic expansion of China has been nowhere better displayed than on the balance sheet of BHP Billiton. Thanks to China's seemingly insatiable demand for minerals and energy, the world's biggest resource group has produced a 2008 financial year profit of $17.8 billion, its seventh Australian corporate profit record in a row.
That figure represents an after-tax profit of nearly $350 million a week. The group's profits have risen 700 per cent since BHP and Billiton merged in 2003, an increase driven by soaring prices across the wide spectrum of the organisation's interests, from petroleum to iron ore.
And while many are wondering if China can continue to grow as quickly as it has been, given the slowdown in the economies of developed countries, BHP has pointed out that China can slow considerably without affecting the volume of commodities it will have to buy. The rapidly compounding effect of China's expansion means a reduced growth rate is applied to a larger base, making the outlook for commodity exporters still seem very bright.
China's domestic market may have reached sufficient critical mass to sustain substantial growth, even in the absence of strong demand from foreign markets.
What happens in China is of critical interest to BHP and to Australia, and China is also keenly interested in what happens to BHP and Australian resources. BHP Billiton is trying to take over its big rival, Rio Tinto. If it succeeds, the result will be a virtual monopoly with even greater power to set its own prices for the materials it will control.
Earlier this year a state-owned Chinese company bought a 12 per cent stake in Rio Tinto, spending about $16 billion to fire a shot across BHP's bows, warning that it won't easily allow the creation of such a monopoly. Both China and BHP have deep pockets and a lot at stake in the future shape of the global market in commodities. It will be fascinating to see how they reconcile their competing ambitions in the months ahead, and just as interesting to see how this huge battle affects Australia's national interests.
Kids Kare cut
MANY Hunter parents will be deeply disappointed at the decision to halt the popular Kids Kare Line operated after hours from John Hunter Children's Hospital. This service began in 1993 and quickly built a reputation as a reassuring source of advice for worried parents caring for sick children. Trained nurses provided careful advice, helping parents decide whether to persevere at home or to attend hospital for professional help. A 2005 evaluation showed the service was held in very high esteem, with callers especially valuing the person-to-person contact. The service probably saved thousands of unnecessary trips to casualty, lightened the load on the hospital and helped often inexperienced parents put their children's symptoms into perspective. It is hard to know which will feel the loss of this service more keenly: the region's parents or the hospital itself.
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