China's Stimulus Package, what is it and will it work? 03 June 2009

Earlier this year the Chinese government announced a RMB 4 trillion stimulus package. What is this stimulus package? How much of it is 'real' money? How is it being spent? Which Chinese companies are most likely to benefit? Last but not least, what are the implications and opportunities for foreign businesses and financial investors?

China-focused, senior executives from various industry sectors, were given value for money on 03 June when they heard from three expert and well-informed panellists about China's Stimulus Package. Hailed as "a triumph!" by one happy attendee, the panel, including Jeremy Gordon (UK Trade & Investment); Gareth Leather (Economist Intelligence Unit) and Dr Alex Mackinnon (co-author of "China Calling: a Foot in the Global Door") gave an overview of the Stimulus Package from various angles, including the geographical emphasis and the likely sectors to benefit. The key of the discussion was to establish where UK businesses might have a chance to win projects.

One attendee said in summary of the event that "it is lucky to attend an event where one member of the panel is good, but to have three excellent speakers is very rare!" Another said "I learnt a great deal - it was very interesting!"China's Stimulus Package: what is it and how can UK Plc take advantage of the opportunities? June 03 2009 China-focused, senior executives from various industry sectors, were given value for money on 03 June when they heard from three expert and well-informed panellists about China's Stimulus Package. Hailed as "a triumph!" by one happy attendee, the panel, including Jeremy Gordon (UK Trade & Investment); Gareth Leather (Economist Intelligence Unit) and Dr Alex Mackinnon (co-author of "China Calling: a Foot in the Global Door") gave an overview of the Stimulus Package from various angles, including the geographical emphasis and the likely sectors to benefit. The key of the discussion was to establish where UK businesses might have a chance to win projects.

One attendee said in summary of the event that "it is lucky to attend an event where one member of the panel is good, but to have three excellent speakers is very rare!" Another said "I learnt a great deal - it was very interesting!"

Summary findings of the event included the following points:

• China's Stimulus Package actually comprises many packages, not just one and some projects were already in the pipeline when the RMB 4trillion package was announced. As a result, the various quoted financial figures are confusing. The main point, is that the numbers are BIG!
• The speed of implementation has been accelerated in some geographical areas and sectors. Consequently, the Package is "more oil than lubrication."
• China needs to boost domestic levels of consumption to boost the economy and the overall success of the Package.
• Niche sectors including airport and railway development, healthcare, education and carbon capture are set to benefit.
• UK companies need to find out who is tendering for the projects and supply the suppliers. In addition, it is important to see which sectors are securing the contracts and assess which of these projects are winnable for the UK.
• UK banks are unlikely to lend much to the Package as they are already so leveraged in the UK due to the recession.
  
  To purchase a copy of the UKTI / S&P China Consulting Summary White Paper or the Full Review of China's Stimulus Package Report June 2009 (over 50 pages), please select from the purchase options below. Contents of the Full Report include the following:
  
  - Overview of the stimulus package
  - Explanation of the spend process and timing
  - Package regional split
  - Identification of some of the key companies expected to benefit and a brief overview on each
  - Thoughts on where the opportunities are for foreign companies and investors –including appropriate strategies
  - 6 charts
  - Appendix outline of key tendering agencies and a sample of some of the projects

Speakers included:   Jeremy Gordon, UKTI: Business Specialist for China
                                  Gareth Leather, Economist Intelligence Unit: Senior Editor/Economist
                                  Dr Alex Mackinnon, co-author, "China Calling: a Foot in the Global
                                  Door"
                                  Chair: Dr Kerry Brown, Chatham House: Senior Fellow and Author