NEW YORK China is set to
push ahead with a vast infrastructure program that will boost
economic growth as the countrys leadership change takes
place, according to Klaus Kleinfeld, chairman and chief
executive officer of Pittsburgh-based aluminum producer Alcoa
"The next injection will be
infrastructure-driven, and the good news is that those projects
are shovel-ready as the government stopped some of them when it
was worried the economy would overheat," Kleinfeld said. "The
reason they didnt go for an infrastructure program
earlier is that they were worried about inflation rates in
China, which basically means consumer pricesincluding
foodwhich tends to lead to unrest."
Thursday was the start of a
once-in-a-decade leadership change in China as the 18th
National Party Congress got underway in Beijing. The actual
government change is not slated to take effect until March, but
the new leaders will emerge in the week ahead.
Many metal market investors are
hoping the new regime will resume stimulus plans that have
fallen away in recent months, slowing the countrys
"I had a chance to spend a week
in China a couple of weeks ago and pretty much saw the top
existing leaders and some of those that most likely will be in
the top new guard, and talked with them about their views on
what theyre doing to the economy now," Kleinfeld said.
"Im optimistic that youll see the impact of the
change and the new program already shining through at the end
of the year in their numbers, so I think China is going to
continue to be a very positive growth story."
Kleinfeld said he expects the
transition to go "relatively smoothly" and that Chinas
leaders are clear on what they need to do to keep its natural
resources sector running efficiently, including reining in
overcapacity and preventing the waste of resources that are in
short supply, including energy.
"I believe once the new people
are in their seats the ripple-through effect on the whole
system is probably going to be over by the end of the year, and
youll see these things unfolding," he said.