China mulls giving domestic products 20% price evaluation preference in gov't procuremen

China's Ministry of Finance (MOF) has released a draft on the standards and implementing policies regarding domestic products in government procurement, planning to give products made in the country a 20 percent price evaluation preference if they meet relevant standards.

The ministry said it formulated the draft based on international experience and China's own conditions, which is aimed at building a unified, open and competitive government procurement market system while fostering a market-oriented and law-based international business environment.

The draft is open for public opinions until January 4, 2025, according to a statement on the MOF website on Thursday.

The standards regarding domestic products in government procurement should meet three requirements at the same time, according to the document.

First, the product must be produced in China, which means transformation of attributes from raw materials to components and products within the Chinese territory, excluding labeling and simple packaging. Second, the production cost of components manufactured within the Chinese territory for a product must reach required level, which will be dynamically adjusted according to specific products. Third, on the basis of the above-mentioned two requirements, for specific products, key components and key production processes should be completed within the Chinese territory.

According to the draft, the standards apply to goods, mainly industrial products. Made-in-China goods will be given 20 percent price evaluation preference in government procurement when they're considered alongside products made abroad.

Based on fully seeking opinions from various parties including domestic and foreign-funded enterprises and industry associations, the MOF and related government agencies will formulate proportion requirements for the production cost of components within the Chinese territory and the requirements for key components and key processes for specific products in the next three to five years. Prior to this, products are considered domestic products as long as they are made in the Chinese territory, the MOF said.

Domestic and foreign-funded enterprises will be equally treated under the policy, the MOF said. Whether the products are manufactured by domestic or foreign-funded enterprises, they will enjoy government procurement policy support once they meet standards, according to the ministry.

The MOF said the standards regarding domestic products and support policies in government procurement are in line with WTO and other international trade rules. After China joins international treaties such as the WTO Agreement on Government Procurement and the Comprehensive and Progressive Agreement for Trans-Pacific Partnership, China will grant exemptions to the products of other members in line with the treaties, the ministry said.