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Page last updated at 09:41 GMT, Monday, 16 February 2009

China warns against protectionism

By Chris Hogg
BBC News, Shanghai

A Chinese migrant worker searches for a job in Guangdong (file photo)
Chinese migrant workers are struggling to find jobs amid the slump

China has warned that protectionist measures in other countries' economic stimulus packages will make the bad financial situation even worse.

A commerce ministry spokesman expressed "deep concern" about the measures.

At the weekend, a commentary published by the official news agency Xinhua singled out the "Buy American" provisions in the US' stimulus package.

China fears this is a sign the Obama administration will pursue protectionist policies in the future.

America's multi-billion dollar stimulus package was approved by Congress on Friday.

The package includes provisions which prohibit the purchase of foreign iron, steel and other manufactured goods for public building projects.

'Poison'

The Xinhua commentary that attacked US protectionism said "it wasn't a solution" but "a poison".

The commerce ministry spokesman did not mention the United States by name at his regular briefing.

A bike shop workers waits for customers, Beijing (Feb 2009)
China's export-dependent economy is slowing amid fears of protectionism

But when he was asked about the "Buy American" clause he said each country should be careful not to send out the wrong message, or to put in place measures that would cause damage.

He said China was deeply concerned about the decision by some countries to include clauses in their stimulus packages that prioritised the purchase of products from their own markets.

The Chinese have now raised the issue several times in briefings, commentaries and articles in the state media.

Beijing was concerned when the new US treasury secretary accused it recently of manipulating its currency to ensure it enjoyed favourable trading conditions.

The two massive economies are highly dependent on each other.

China does not want a trade war which would hamper its efforts to recover from its economic slump.

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