BEIJING, June 18 (Reuters) - Steps by China to ensure that its 4 trillion yuan ($585 billion) stimulus package benefits domestic firms run counter to the leadership Beijing has shown in fighting protectionism, the World Bank said on Thursday.
The National Development and Reform Commission, China's powerful planning agency, and other ministries issued a notice in early June saying government bodies should procure locally made products wherever possible for projects financed by the state.
The circular merely reinforced existing guidelines and attracted little attention until the China Daily, an English-language state-owned newspaper, wrote about it this week.
Ardo Hansson, the World Bank's chief economist in China, said he was surprised by the regulations because Beijing understood that, as a big exporting nation, China had more to lose than most countries by restricting procurement.
"China has earned an enormous amount of goodwill and is actually leading the charge globally to avoid protectionism," Hansson told a news conference.
Western executives are puzzled by the directive because, they say, it is foreign firms that are suffering discrimination.
Several provinces rolled out "buy local" programmes earlier this year to capitalise on the stimulus package [ID:nPEK176822] [ID:nPEK178419], while Western executives have complained recently at not being given a fair crack at China's booming market in wind turbines. [ID:nPEK319921]
The American Chamber of Commerce in China said in a statement that any protectionist policies emanating from Beijing or Washington could prove "extremely detrimental" to decades of progress on promoting greater openness.
"It is critical that spending decisions related to the (stimulus packages) are made with economic and social, not political, rationales in mind," it said, without referring specifically to the notice.
Hansson said there was nothing in China's trade figures to suggest foreign firms were grabbing business from local rivals.
"While the economy is doing relatively well, imports are actually falling quite a bit and manufactured imports are not that high.
"The share of imports in GDP currently is falling. If you would have thought that there was a big influx of foreign purchases, you would expect things to be the other way round," he said.
The European Union is examining the Chinese guidelines to determine whether they breach World Trade Organisation rules, a spokesman for the European Commission, which oversees trade policy for the 27-nation bloc, said on Wednesday. [ID:nLH857922] (Reporting by Alan Wheatley and Zhou Xin; Editing by Ken Wills)