China has imposed a requirement for its stimulus projects to use domestically made goods.

Projects would have to obtain official permission to use imported goods, according to an order issued by China's main planning agency and eight other government bodies.

"Government investment projects should buy domestically made products unless products or services cannot be obtained in reasonable commercial conditions in China," says the order, dated June 1 and reported this week by state media.

"Projects that really need to buy imports should be approved by the relevant government departments before purchasing activity starts," it adds.

China's 4 trillion yuan (US$586 billion) stimulus is aimed at insulating China from the global slump by boosting domestic demand through higher spending on highway construction and other public works.

China's World Trade Organization commitments require it to treat foreign and domestic goods equally in commercial trade. But China has not signed a WTO treaty that extends such requirements to government procurement.

Authorities are looking into complaints by Chinese companies that they were unfairly excluded from stimulus projects, the government statement said.

"Bidding documents set a lot of discriminatory conditions to illegally limit Chinese-made equipment. This phenomenon is very obvious and in some cases very severe," the statement said.

(Shanghai Daily June 18, 2009)