China vows no 'Buy China' bill

Beijing - China promised on Monday to avoid "Buy China" protectionist measures in its multibillion-dollar stimulus and appealed to other governments to support free trade.

"China will not practice `Buy China.' We will treat domestic and foreign goods equally so long as we need them," said a deputy commerce minister, Jiang Zengwei, at a news conference.

Jiang made no mention of controversy over a measure in Washington's proposed stimulus to favor US iron and steel producers, which has drawn criticism from Japan, Australia and Canada. But he called on foreign governments to promote trade.

"Under these circumstances, I believe every country must energetically develop international trade," Jiang said. "Why would one want to practice protectionism in the current situation?"

The impact of the global economic crisis on China is growing, Jiang said, though he gave no details and did not respond to a question about January's economic performance. The government has yet to release January trade or other figures.

Jiang said Beijing is stepping up measures to generate jobs and reduce reliance on cooling exports. He said they include a campaign to expand China's retailing industry by supporting the creation of 150 000 small shops in the countryside this year.

Fuel consumer spending

"This initiative can be seen as a very strong push toward employment," he said.

The government says at least 20 million migrant workers have lost their jobs due to global turmoil and it is trying to avert rural unrest.

A stimulus bill under consideration by the US Senate would require that American-made iron or steel be used in projects paid for by the bill. President Barack Obama has expressed concern about the provision and critics have warned that it might spur foreign governments to impose their own protectionist measures.

Senators agreed to specify in the bill that international trade agreements may not be violated. But they rejected a proposal to remove the requirement.

China launched a 4 trillion yuan ($586bn) stimulus in November that is aimed at insulating the country from the global downturn through higher spending on construction and other projects. Authorities hope that will fuel higher consumer spending.

Foreign companies are worried Beijing might try to favor Chinese companies. But measures announced so far appear to treat suppliers equally. The government says foreign appliance manufacturers are eligible to take part in a programme that subsidises purchases of electrical goods by rural households.

- AP