Miner Rio Tinto Group sees a host of near-term economic challenges in China, including in the country’s real estate industry, but reaffirmed its positive medium- and long-term outlook.

“It has been bumpy but I think we need to remember that they have, in effect, come out of Covid a year after us,” chairman Dominic Barton told Bloomberg Television in an interview on Monday. He added: “There are also challenges, as you mentioned. There is a big real estate issue.”

China’s recovery since Asia’s largest economy shed Covid Zero curbs has disappointed, with continued weakness in the property sector. Figures on Monday showed inflation eased to zero in June, while factory-gate prices fell further, underlining continued weakness in demand. That’s been a headwind for commodities including iron ore, a mainstay Rio product and key profit driver.

Policymakers were seeking a new balance, with a greater priority on high-quality growth, Barton said. “They want to see more focus on the consumer, services, that type of thing. But those are not easy to make happen.”

Iron ore fell 13% in the second quarter, overturning gains seen in the first three months. Benchmark futures in Singapore were 2.4% lower at $105.15 a ton at 12:01 p.m. in Singapore, set for the lowest close in about a month.

Copper also dropped, with three-month futures declining 0.5% to $8 328 a ton on the London Metal Exchange.

“The question is you can’t force consumers to buy — they’re going to buy when they’re confident,” Barton said, adding that Chinese households were currently saving rather than spending. “But there are enough of the fundamentals to feel good about the prospects as they move forward.”

The Rio Tinto chairman highlighted the need for continued urbanization in China as a source of sustained iron ore demand, while also repeating his company’s plan to boost its exposure to copper, lithium and nickel as consumption surges to meet the needs of the global energy transition.

“We are so short of copper as humans it’s not funny,” Barton said.