The rally since March in global equities has been underpinned by the massive policy response from governments around the world. How ironic, then, that the very policies promoting global growth – fiscal spending, tax breaks, bank bail-outs, etc – could ultimately be diluted by government initiatives supportive of protectionism.

Protectionism has become a growth industry with numerous nations – including the US – opting for various direct and indirect barriers to trade since September's global financial meltdown. The World Bank notes nearly 90 new restrictions on trade since October. Of the Group of 20 nations, 17 countries have implemented some type of trade protectionism since pledging in November not to do so. Recent trade-related moves range from iron and steel tariffs in Russia, to massive automobile subsidies in the US and Europe, to agricultural restrictions in Argentina and Brazil. Everyone, it seems, is doing it, with China the latest to embrace a “buy local” platform. Beijing has introduced an explicit “Buy China” policy that requires government procurement to be focused on Chinese products or services unless they are not available in the country or cannot be bought at a reasonable price. The new policies have sparked a sense of unease in Washington, but with the $787bn US fiscal stimulus package choked full of “Buy American” provisions, the US doesn't have a leg to stand on when it comes to opposing the Chinese initiatives.

What's more, the latest edicts from Beijing are notably worrying since they emanate from one of the strongest economies in the world. If China – with an economy expanding at an annual rate of roughly 7 per cent – feels the need to opt for blatant protectionism to mollify worker discontent, think of the mounting pressures on states whose economies have sunk deep into recession.