A Chinese executive with holdings in Australia's mining industry advised on Monday Prime Minister Julia Gillard and Perth business leaders for Australia to prepare a back-up plan in case the mining boom ends.

The proposal of Citic Pacific Executive Chairman Dongyi Hua is for Australia to meet the strong demand for high-quality food, particularly beef with China's 100 million wealthy residents as their main target.

These rich Chinese are not price sensitive, Mr Hua said at the In The Zone business roundtable. He said the wealthy Chinese would not mind paying for a kilogramme of Australian beef whether the price tag is $15 or $50.

Citic has an iron magnetite mining project in Pilbara about to start production in September after major delays and several cost overruns. When Citic purchased the mining tenement in Pilbara a few years ago, it started a cattle export operation on a pastoral property within the same area.

While some Australian politicians have questioned the fast-paced growth of Chinese investment in the country's agriculture sector, Wesfarmers Chief Executive Richard Goyder has dismissed the overreaction to Chinese investment in farms.

Mr Hua pointed out that China's steel production could be peaking and with this development Australia could lose up to 100 million tonnes of supply yearly in the global iron ore market. Besides the expected decline in demand for steel-making ingredients, the Chinese executive said the Asian nation's arable land is shrinking but its population, currently at 1.6 billion, keeps on growing.

He said Australia could help fill in the gap by making available to China high-quality food, not just iron ore and coal.

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