Rio Tinto sees China GDP growth at 8-9 pct in 2009

By Sonali Paul

MELBOURNE (Reuters) - Global miner and takeover target Rio Tinto (RIO.AX)(RIO.L) has cut its outlook for Chinese economic growth in 2009 to 8-9 percent, but expects commodity prices to bounce back some time next year.

In the wake of the global financial crisis, market tumbles and China's moves to cool the economy, Rio Tinto's chief economist, Vivek Tulpule, had to cut his growth forecasts for China, the main driver of soaring demand for commodities.

"Now we're saying that we think China will grow between 8 and 9 percent. That's a reduction in our view," Tulpule told Reuters in an interview.

"Our view about commodities demand was that it would slow as the Chinese economy slowed, but it slowed faster."

The weaker outlook for China was mainly being driven by revised forecasts for a recession across industrialised countries in the OECD as a whole.

But Tulpule said the downturn was sowing the seeds for a recovery in commodity prices in 2009.

That will be driven by a pick-up in Chinese demand as the government's recent moves to ease credit constraints kick in over the next six months, and as newer, high cost, producers start to cut production.

"That combination of factors could give us a bounce in 2009," he said.