“Buy Chinese” – New Policy or New Context?
China Issues: June 2009 Commentary
Reports of a new “Buy Chinese” policy, echoing the “Buy American” clause of the U.S. stimulus package, are stoking fears that China intends to curtail foreign participation in its unfolding stimulus plan. U.S. investors, however, may want to refrain from jumping to conclusions as the actual treatment they receive in China is almost always in the hands of local decision-makers.
Unlike the U.S. “Buy American” clause, “Buy Chinese” is not law; it merely provides guidance to local officials regarding their purchasing decisions. As nearly three-quarters of China’s stimulus package is being financed at the local level, where all projects are actually being implemented, there may be ample room for discretion.
Read the June commentary to see why “Buy Chinese” is nothing to sound the alarm about.
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