Copying the West’s Stimulus Patriotism

A bulk of China’s $585-billion stimulus spending has to be funnelled through homegrown companies

Patriotic protectionism is sweeping across the world in these times of global recession. China has made it clear that a bulk of its $585-billion stimulus spending has to be funnelled through homegrown companies.

That means Chinese companies, by edict, will get preference over American or Indian infrastructure companies in building roads, ports and bridges. The government says it was forced to make such a stipulation because domestic producers said they were treated unfairly in government-supported projects elsewhere. The US too ensured distribution of lucrative reconstruction projects in Iraq and Afghanistan to companies from allied and strategically friendly nations, but that’s chump change compared to China’s spending spree. Ergo, the latest Chinese edict comes as a surprise to many US and European companies, who through joint ventures, have acquired a local character but would still be left out of the scene. At a time when the entire world is looking at China’s stimulus package, this is a dampener.

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