Speaking at the Lowy Institute in Sydney last night, Kloppers said while Australia had the benefit of an impressive natural endowment, advantageous location near markets in Asia and a strong economic and regulatory foundation, future growth was not a done deal.

He said that China's growth and transition to an industrialised economy was not set in stone, although he believed the nation's ascendancy would continue.

"China is doing something immensely difficult and in many ways unprecedented. Many things will have to go right," he warned.

China would need to manage the political and social pressures coming with the sweeping changes of its growth.

Australia would also need to adjust to the changing world order, as China and other parts of Asia came to dominate world affairs.

"Australia's history has been a long story of adaptation from its European heritage to its Asian environment, and that story is not over yet," Kloppers said.

"Along the way there will be difficult issues and Australia will have no choice but to work these through in a patient, open-minded and tolerant way."

While cheerleading for the China story, Kloppers said foreign investment in Australia's mining industry, which is coming more and more from Chinese sources, was critical to ensure its growth.

"Both Australia and Australian companies need to be open to this kind of investment, despite its immediate and strategic implications," he said.

The South African-born chief executive of the world's biggest mining company also had advice for China itself as the nation moves to lock in iron ore and other metal supply for its future growth.

He said that countries seeking to ensure supply should entrust this to the market.

"The history of Japan's economic rise provides a useful lesson," he said.

"At that time, it too had fears about natural resources security. In time, and on the basis of experience, Japan came to trust markets to deliver the raw materials it needed.

"For those countries industrialising now, the best answer to the question of resource security will again be found in trusting the hand of the market."

BHP has long been a vocal supporter of moving iron ore pricing away from a benchmark-based negotiation with steel mills - which in China are often state-owned enterprises - and towards a more open pricing structure.

Kloppers said the comparison between the transparent pricing of metals like copper, tin and zinc on the London Metal Exchange as opposed to iron ore showed a clear market system was preferable for both buyers and sellers.