Protectionism: To Promote or Protest?

Related entries: Business Issues, Economy, General, News, Risk & Law, Trading

While state media may like to peddle the notion that “‘Buy China’ is ‘fair and competitive’ (RT @China_Daily: China denies protectionism allegations http://tinyurl.com/m6fgrk 4:05 PM Jun 18th from TweetDeck), others may beg to differ…

Not long ago China was promoting openness, and protesting “Buy Amercian” moves in the US, so it came as a bit of a surprise when state media reported an official “Buy China” policy on the back of the stimulus spending plan. Some of the background was noted in these tweets:

– Stimulating protectionism! RT @ftchina: ‘Buy China’ policy set to raise tensions http://tinyurl.com/l97anc 6:00 PM Jun 16th from TweetDeck”

– Stimulus protectionism dangers – NYT: Lesson for China in Smoot-Hawley http://bit.ly/dZUm5 6:48 AM Jun 18th from TweetDeck

While we already had reports of local content requirements and protectionist policies, they were, until now, of an “internal” nature. It seems that local sentiment – and, perhaps worse than expected economic data – are the cause, as we have reported:

– Uncertainty linked to “buy Chinese” policy? – “China’s Economy Is in ‘Critical’ Phase of Recovery” http://bit.ly/pLEY5 12:36 PM Jun 17th from TweetDeck

– A stimulated forecast of 7.2% – WSJ: World Bank Ups China 2009 GDP Forecast; Cautious On Recovery http://bit.ly/tbV8X 6:46 AM Jun 18th from TweetDeck

Certainly lending does not seem to have slowed, so it seems that there is still work to be done.:

– RMB6 trn lending already in 09. RT @caijingonline: Fear the Dark Side of China’s Lending Surge http://t.caijing.com.cn/Zkhda4 7:48 AM Jun 19th from TweetDeck

In addition, we noted a major corruption probe (it is not the only one), and think this could be a warning to others who are being handed big stimulus budgets to spend wisely, or risk the consequences:

– Big trouble in Binhai RT @aimeenbarnes: “China Fires Top Official for Key Industrial Zone” in Businessweek http://tinyurl.com/kkv4m9 9:42 PM Jun 17th from TweetDeck

If nothing else, the overt protectionist move will stimulate debate…

One Response to “Protectionism: To Promote or Protest?”

  1. Archive » Protectionist Duty? | China Business Blog Says:

    […] it does not run off the rails and end in another nasty crash… While they are nothing new (see here), protectionist tensions are never far below the surface in these days of economic crisis (or […]

Leave a Reply

You must be logged in to post a comment.