German minister vows action against China protectionism

24th June 2009, Comments 0 comments

Beijing has ordered local governments to favour domestic companies when carrying out projects that are part of a massive anti-crisis stimulus package.

Berlin -- German Economy Minister Karl-Theodor zu Guttenberg said Tuesday he was concerned about a trend towards protectionism in China and vowed to take measures to prevent damage to Germany's economy.

"I am deeply concerned about developments in China and will do what I can to avoid any negative consequences for Germany's exporters," zu Guttenberg was quoted as saying in an interview with the Frankfurter Allgemeine Zeitung daily.

"In times of crisis, there is a temptation to seal off the domestic economy with protectionist measures. That is the wrong answer, as we learned during the last big global economic crisis in the 1980s," he added.

Beijing has ordered local governments to favour domestic companies when carrying out projects that are part of a massive anti-crisis stimulus package, Chinese state media reported last week.

China unveiled a four-trillion-yuan (580-billion-dollar, 417-billion-euro) package in late 2008 aimed at revitalising the economy, which has been hit by the global meltdown.

The EU has sought "further clarification" over the so-called "Buy China" order but authorities in Beijing have insisted there will be no "discrimination against foreign enterprises or products."

Despite zu Guttenberg's concerns, German industrial giant Siemens is expected to land orders worth 2.9 billion dollars (2.1 billion euros) over the next three years as part of the stimulus plan, Chinese media reported Tuesday.

Bilateral trade with China also appeared to be holding up relatively well despite the global crisis, according to German statistic office figures published earlier Tuesday.

While total exports dived 21 percent in the first three months of the year, the fall occurred mainly in shipments to Britain, France, Russia and Turkey, while exports to China falling only 3.3 percent over the year.

AFP/Expatica

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