The price of iron ore paid by China has fallen by nearly a quarter from its peak in September to US$138 per ton. However, the miners did not show signs of slowing capital spending. Anglo American has invested one-fifth of its $2.3 billion in capital expenditure in the first half of the year in iron ore development projects in Brazil and South Africa. Since 2007, the scale of its iron ore development projects for steelmaking has been expanded by a factor of four. In the fiscal year ending in June, BHP Billiton’s capital expenditures were 40% more than its $30 billion net operating cash flow. This year, BHP Billiton has allocated 8.4 billion US dollars for iron ore projects. Rio Tinto and Vale have also invested heavily in expanding production capacity. These dazzling expenses do not seem to match the global economic climate. In the third quarter, China's economic growth rate fell to the lowest point in more than two years, although it was still as high as 9.1%. However, the OECD has predicted that China's growth rate will be 8.5% next year. This figure is 8.5 times that of some advanced economies. On the other hand, China’s stock market has fallen for four consecutive weeks in the fear of economic slowdown. China's official purchasing managers' index (PMI) fell to 49 last month, indicating that the manufacturing sector is shrinking. As China's economic base gradually expands, growth will surely slow down. However, investors should maintain a correct understanding of the situation. China is still in the early stages of urbanization. HSBC estimates that China’s urbanization rate will not approach 50% until 2014 (while the United States reached this level around 1920), and it may now be as long as ten years before China’s iron ore demand peaks. Away. The pressure on the mining sector seems to be overdone. In British Pound Sterling, BHP Billiton and Vale's share prices have fallen by 20%, while Rio Tinto and Anglo American have fallen by a quarter. Miners still have the ability to export iron ore to China at prices 55% to 65% lower than the spot price. With such a high level of profitability, miners do not need to slow capital spending at all unless there is a sharp drop in demand. The Lex column is a short commentary co-authored by FT critics, providing insightful analysis of global economics and commerce.