Stimulus spending in China already is giving a boost to U.S. companies such as Caterpillar Inc. (CAT), but benefits from a U.S. stimulus package probably won't be seen until next year, Caterpillar's CEO said Thursday.

China is the third-largest export market for Caterpillar, the Peoria, Ill., based manufacturer of heavy equipment used in logging, construction and mining industries. In remarks at the Council on Foreign Relations, Caterpillar Chairman and Chief Executive James Owens said Caterpillar sales in China took a hit from the global economic downturn, but "bounced back pretty smartly," thanks to China's stimulus spending.

"Shovel-ready" projects in China got off the ground within a matter of weeks, something Owens said won't be seen in the U.S. He predicted the $787 billion U.S. economic stimulus package signed into law in February isn't likely to be felt until the first half of 2010.

"We're talking nine months, realistically," for stimulus-funded construction projects to move into high gear, said Owens.

Although Owens predicts the recession will end in the U.S. sooner than in Europe, he expects emerging markets are going to be the key to economic growth in the future. He urged the Obama administration and Congress to support free trade, saying "turning inward would be a tragic mistake."

The Caterpillar CEO called on other executives to support free trade and speak up against "buy American" initiatives and "silly legislation" that could hurt U.S. businesses.

"Enron's over, get out there," he said.

While Enron Corp. famously used off-the-books deals to conceal debt, Owens noted that U.S. companies have responded to the latest economic downturn by hoarding cash. While stashing cash makes sense as banks and capital markets remain skittish, Owens said it "is beginning to constipate" the U.S. and the rest of the world.

- By Judith Burns, Dow Jones Newswires, 202-862-6692; Judith.Burns@dowjones.com