China Contractors Go After Foreign Stimulus Funds

After the creation of a massive construction industry in China, it appears this industry is exporting its services worldwide. Tax payer stimulus dollars doled out by other governments, ostensibly in the interest of the local people, are a prime target.

With many countries in the world adopting stimulus plans to drive demand, China has been scrambling for these public spending dollars. And it is well placed to do so...

Services revenue from overseas amounted to $32.2 billion, up 52 percent from last year, outpacing the average growth of 30 percent over the past few years. Chinese companies signed new contracts worth $64.6 billion, an increase of 38 percent from last year...

Chinese construction companies were the biggest beneficiaries. China Railway Construction (CWYCF.PK) said the value of newly entered overseas contracts surged 98 percent in the first half, representing one fifth of the total new contracts signed. The success of Chinese contractors is not limited to emerging countries. China’s Gezhouba Group is involved in Australian mining projects. An aircraft technology company has got a big contract for wind power projects in the United States. And a Chinese contractor won a bid to build the Hamilton Bridge in New York.

I'm not against these companies going after foreign contracts. I just think this highlights how stimulus spending might not be going to the people it's intended to.

Comments

[Dave Wrixon:]

Stimulus money rarely does what is intended, but it is always more damaging if you had to borrow the money in the first place. Of course it is much worse if you have borrowed it without having a clue how it is going to be paid back.

Sep 06 09:32 AM

[HaavBline:]

Most in the global construction industry haas been expecting this day for years.

Having built the largest dams, tunnels, airports, bridges, harbors; most challenging highways and railways in the world. China's construction industry enjoys not only capacity and cost advantages, but also advanded technological strength.

When China's long term internal infrastructure build up begins to level off in 5-10 years, they will be even more formidable competitors.

Sep 06 09:54 PM

[sod:]

Foreign contractors are not necessarily a negative. They can and often bring efficient competition while employing and purchasing from the local economy.

Sep 07 10:57 AM