Stimulus funds boost Siemens China

08:28, December 09, 2009      

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Infrastructure spending from China's economic stimulus program has provided a boost to at least one foreign firm doing business in the mainland: Siemens China, which announced Tuesday it had signed new orders worth more than 2 billion yuan ($292.83 million) in just a few days.

Siemens China announced its sales Tuesday, 1.3 billion yuan ($190.34 million) of which is accounted for by airport logistics infrastructure in Beijing and orders for signaling infrastructure and rolling stock for metro lines in Chongqing, Suzhou, and Hangzhou.

The company could not provide details on the bidding process used to secure the deals.

The company received another 750 million yuan ($109.81 million) in healthcare spending in various Chinese provinces and cities. It detailed one deal with Heilongji-ang Province: the company signed a memorandum of understanding with the Health Department of Heilongjiang Province to provide basic medical equipment, services and training of local doctors.

"We are fully on track in reaching our target of generating 20 billion yuan ($2.93 billion) from China's stimulus programs until 2012," said Richard Hausmann, CEO of Siemens China.

"It's difficult to quantify (what is counted under the stimulus program), but the 20 billion yuan ($2.93 billion) goal can definitely be reached in the time frame."

Hausmann said the company expects 15 billion euros ($22.29 billion) in incremental sales from stimulus programs globally, and "China is just part of it."

"Not all stimulus packages (will) end by 2010, and globally there are other stimulus packages running longer," said Peter Löscher, president and CEO Siemens AG.

Siemens is expected to receive far more new orders from China's stimulus program than its target, said Li Xiaogang, director of the Foreign Investment Research Center at the Shanghai Academy of Social Sciences.

"Multinational companies like Siemens and French Alcatel-Lucent have core technology advantages related to infrastructure projects, and they are able to make more deals derived from China's stimulus program," Li said.

Siemens' new orders worldwide dropped 16 percent in the 2009 fiscal year that ended October 1, according to its annual report. Siemens China is to disclose its key performance indicators next week, a company spokesman said.

Source: Global Times
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