Ian Cheshire joked that it sounded like a party political broadcast and the Kingfisher chief executive's sales pitch to investors yesterday was, indeed, almost a straight lift from Budget Day. The next four years will be centred around prudence and stability as he tries to revive the sleeping giant.

It is an unenviable task and few would have bet that Mr Cheshire's most pressing priority would be to fix B&Q's business in the land of golden opportunity, China.

B&Q is the biggest player in China's home-improvement market, with 62 stores. However, at a time when China's economy is booming, the business reported a £12 million loss and flat like-for-like sales - worse even than B&Q's UK business.

Intriguingly, the problems stem from government interference, such as forcing retailers to cut the amount they charge suppliers when their products fail to sell as well as expected. China has also drawn up legislation to stop speculators driving up property prices in cities such as Shenzhen. This has hit apartment sales, the lifeblood of B&Q's kitchen and bathroom business.

Kingfisher faces delicate negotiations as it looks to consolidate its position in China, shut some underperforming stores and possibly shed Chinese workers.

Western observers have long expected energy companies to face rough rides in emerging markets such as China and Russia, given the battle over natural resources.

B&Q's task is nowhere near as delicate as that of BP in dealing with the Kremlin, but its experience is a gentle reminder to the likes of Marks & Spencer that curing your woes by opening a few stores in Shanghai may not be as simple as it sounds.

siobhan.kennedy@thetimes.co.uk

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