By Yuriy Humber and Ryan Chilcote Feb. 1 (Bloomberg) -- Russian billionaire Oleg Deripaska said investor concerns that China’s efforts to contain inflation may derail the economy are “completely unreasonable” and growth will remain the government’s priority. “Everyone’s betting on high inflation in China,” Deripaska, whose United Co. Rusal Ltd. last month became the first Russian company to list in Hong Kong, said in a Jan. 29 Bloomberg Television interview. “More money supply may cause higher inflation, but I can’t see that stopping their growth.” China’s benchmark stock index fell to the lowest level since October on concern steps to limit lending and contain inflation at a 13-month high will slow the world’s fastest- growing major economy. Deripaska said Chinese manufacturing customers of Rusal, the world’s largest aluminum producer, have had “no problem” in getting credit. “In our developing world we have a different inflation sentiment,” Deripaska, 42, said on the sidelines of the annual meeting of the World Economic Forum in Davos, Switzerland. Deripaska echoes Mark Mobius and Stephen Jen of BlueGold Capital Management LLP who said investors are overly concerned about the tightening measures. A slowdown in lending may benefit China’s economy by reducing risks, Mobius, who oversees about $34 billion in emerging markets as chairman of Templeton Asset Management Ltd. said Jan. 27. China’s Shanghai Composite Index sank 2.1 percent as of 2:28 p.m. local time), set for the lowest close since Oct. 12, and extending a 4.5 percent decline last week. The MSCI Asia Pacific Index dropped 3 percent last month amid concern central banks in countries from China to India will tighten monetary policy to keep inflation in check. Inflation Challenge The Chinese economy expanded 10.7 percent during the last quarter of 2009, the fastest pace since 2007, stoking concern the government will tighten lending measures. China has ordered some banks to pare lending, raised the ratio banks must set aside as reserves and guided bill yields higher last month. Managing China’s inflation expectations is the “first challenge,” People’s Bank of China Deputy Governor Zhu Min said Jan. 30 at Davos. “We’ll continue with current accommodative fiscal and monetary policy.” Inflation in China accelerated to 1.9 percent in December, and record credit growth of 9.59 trillion yuan ($1.4 trillion) in 2009 has fanned concerns of a property bubble. Billionaire investor George Soros said Jan. 28 that the Chinese stock market is “overheating.” Tapping China China accounts for 5 percent of Rusal’s sales. The Russian company aims to raise that share to 10 percent by 2015. Deripaska said in November that he wants to do more business in China and tap Asian companies as partners for power and aluminum projects in Russia. The International Monetary Fund forecasts China’s growth will accelerate this year to 10 percent, from 8.7 percent in 2009. Deripaska also said he was “very positive” about the Russian market, even as the benchmark Micex equity index has more than doubled in the past year. The best investments in Russia would be OAO Lukoil, its biggest non-state oil producer, natural-gas export monopoly OAO Gazprom, and nickel and copper mining company OAO GMK Norilsk Nickel, Deripaska said. Rusal owns 25 percent of Norilsk. To contact the reporters on this story: Yuriy Humber in Davos via the Moscow newsroom at yhumber@bloomberg.net; Ryan Chilcote in Davos at rchilcote@bloomberg.net

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