William A. Spence, a Senior Counsel at Freeborn, made a presentation to the Jackson Hole Center for Global Affairs, as part of its Global Business Roundtable series. The Center brings to the community of Jackson Hole opportunities for involvement in global affairs.
Mr. Spence focused his presentation on the current investment and economic climate in China, where GDP growth is expected to decline from 11% in 2008 to 6% in 2009, far above the negative GDP growth expected in the United States. In November of last year, the Chinese government passed an economic stimulus plan that is remarkably similar to that which was recently passed in the U.S. Like the U.S. plan, China has focused on infrastructure development (i.e. public transportation, airports and roadways), housing, research and development and environmental concerns related to the development of sustainable energy.
Although the stimulus plans are structured similarly, when compared to GDP, China’s plan is almost double the U.S. plan. China’s economic stimulus plan represents 7% of their country’s GDP, while the U.S.’ plan is just 4% of GDP. Importantly, China’s plan is wholly funded by surplus cash, while the U.S. plan depends on the U.S. selling debt to China. The key message delivered by Mr. Spence was that China, already filled with modern airports, train systems and subway lines, will continue to present opportunities for those interested in making investments in the still quickly growing Chinese economy.