BAILOUT stimulus funding by governments worldwide has been hailed by Cosco CEO Wei Jiafu as helping to raise the troubled Baltic Dry Index, long considered a key indicator of global economic health.

"The stimulus plan is effective. It strengthens people''s confidence," said the head of China''s largest shipping company.

Capt Wei credited the recovery of the Baltic Dry Index to the stimulus packages, particularly the initiatives announced by China that focus on infrastructure spending.

But Capt Wei said the fallout from the economic tsunami would continue to affect other sectors, including the liner industry, car carriers and shipbuilding, reported Turkish Maritime Magazine.

Welcoming US President Barack Obama''s US$800 billion spending package, Capt Wei said: "I think it''s good. If people have jobs, then demand and supply can restart."

Of the Chinese government''s CYN4 trillion ($588 billion) package, Capt Wei said the first phase, involving CYN100 billion and allocated among different provinces in the fourth quarter of last year, has already had an effect in boosting demand.

Pointing the early impact on shipping of the stimulus plans, Capt Wei said the Baltic Dry Index stood at its lowest ever level of 663 on December 5, but had recovered to 2,057 points on February 19. Capt Wei said China''s domestic steel price indexes have also risen, suggesting steel demand is increasing.

Not entirely optimistic though, he said: "For the shipbuilding business, the worst has not yet come." Capt Wei thought shipbuilding would hit rock bottom, possibly next year, "as we know newbuilding orders are shrinking rapidly from the fourth quarter of last year".

Capt Wei said Cosco had curtailed plans to order a total of 126 bulk carrier newbuildings last year, despite dissent from Cosco executives.