Beijing  - China has ordered local governments to buy products and services from domestic firms where possible, according to a notice seen on Wednesday, in a move that some foreign firms regard a "buy local" policy.

The notice from the National Development and Reform Commission and eight other ministries requires local governments to purchase from Chinese firms if the products and services are available from them.

It followed complaints that low tariffs for some imports had favoured foreign firms in bidding for contracts under the government's 4-trillion-yuan (590-billion-dollar) two-year stimulus package.

"Apart from engineering goods or services that cannot be obtained under reasonable business conditions inside China, domestic products should be purchased for the government investment programme," the notice said.

The official China Daily newspaper quoted Lu Renqi, vice-president of the China Machinery Industry Federation, as saying many local governments had favoured imported machinery because of preferential customs tariffs and the gradual appreciation of China's yuan-renminbi currency in recent years.

Other state media quoted the European Union Chamber of Commerce as saying that the government now "seems to have readily wiped foreign providers out" of the stimulus package.

But the newspaper said foreign firms had won several major contracts under the stimulus package, including the 750-million-euro (1-billion-dollar) order for Germany's Siemens AG to provide trains for a Beijing-Shanghai high-speed railway.

Ben Simpfendorfer, an economist with the Royal Bank of Scotland in Hong Kong said the government's new move was "in short, a 'Buy China' policy."

"The edict will spur protectionist sentiment and is at odds with worries about the country's export sector," Simpfendorfer said in a briefing note on Wednesday.

"But the economic impact to trade partners is small," he said, adding that the notice "targets public, rather than private, procurement."

Simpfendorfer said the fact that China was willing to risk accusations of protectionism suggested that problems in its manufacturing industries "could be worse than thought."

Several times this year, the government has denied operating any "buy local" economic policies.(dpa)