Measures in a $789bn US stimulus package that favour US goods are a “poison” that will hurt efforts to solve the financial crisis, an editorial by China’s official news agency said.
Provisions in the US stimulus bill approved on Friday favouring US steel, iron and manufactured goods for government projects are protectionist measures that could trigger trade disputes, said the editorial issued late on Saturday by the Xinhua News Agency.
“History and economics have told us, facing a global financial crisis, trade protectionism is not a solution, but a poison to the solution,” the editorial said.
US labour groups that pushed hard for inclusion of the measures have argued that their main purpose is to ensure that US Treasury dollars are used to the fullest extent to support job creation.
China has promised to avoid “Buy China” protectionist measures in its own multibillion-dollar stimulus effort, and appealed to other governments to support free trade. However, Beijing has started to use instruments such as tariffs to shield some industries.
Deputy Commerce Minister Jiang Zengwei early this month said China would “treat domestic and foreign goods equally so long as we need them”.
Protectionism was a key concern of weekend meetings of the Group of Seven (G-7) industrialised states in Rome. US Treasury Secretary Timothy Geithner assured G-7 ministers on Saturday that the stimulus package would not violate the US’s commitment to free trade.
Source: Sapa-AP, China says US’s plan will ‘poison’ global trade, Business Day, February 16, 2009.
For text: http://www.businessday.co.za/articles/topstories.aspx?ID=BD4A940359
For more on globalisation: http://www.freemarketfoundation.com/issues.asp?id=41
FMF Policy Bulletin/ 24 February 2009
Publish date: 05 March 2009
The views expressed in the article are the author’s and are not necessarily shared by the members of the Foundation.