Beijing announces 'Buy China' policy

The Chinese government yesterday announced explicit "Buy Chinese" regulations requiring that stimulus package funds be spent only on Chinese goods and services, despite months of complaints over similar "Buy American" clauses in the US economic stimulus package, the Financial Times reported. At the same time, it is launching an investigation into local governments for allegedly discriminating against domestic products. In February, Yao Jian, a Chinese commerce ministry spokesman said Beijing was deeply concerned that "some countries [have] raised clauses to prioritise the purchase of products of their own countries in their economic stimulus packages.” State media has relentlessly warned of the perils of protectionism, but analysts say it is difficult to construe the new policy as anything else. “Given how important free trade is for China’s economy this is not the right message for them to be sending to the rest of the world right now,” said Dong Tao, chief China economist for Credit Suisse.