China’s Ministry of Finance has recently implemented new regulations on government procurement of imported products. The rules are designed in large part to promote government purchases from China’s high-tech manufacturing industry, but they will affect a broad range of other products as well. In addition, China has signaled more changes to come by initiating the process to join the World Trade Organization’s Government Procurement Agreement.
Since 2002, Chinese law has provided that the Chinese government must purchase domestic goods and services unless (a) they are unavailable in China, either at all or on reasonable commercial terms; (b) they are for use outside of China; or (c) the laws and regulations otherwise provide for obtaining non-Chinese goods or services.
Regulations approved at a Dec. 27 ministerial meeting include new definitions and procedures that will affect decisions on government procurement of non-Chinese goods.
• Imported goods are defined as those manufactured or produced outside the Chinese customs territory and entered through China Customs into China, regardless of whether they are to be imported or have already been imported into China. This is the first time the term “imported goods” has been defined for government procurement purposes.
• Government procurement of imported goods will be reviewed by designated government officials and technical experts and approved by the government finance office, although detailed procedures and processes for application, review and approval have not yet been established.
• The acquisition of imported goods with conditions of technology transfer and technical training to the Chinese buyers is particularly encouraged.
Further statutory changes in this area were signaled Dec. 28 when the Chinese government applied to join the GPA. Once China becomes a member of this agreement it will be obligated to improve its government procurement standards, procedures and processes with respect to issues such as national treatment, rules of origin, micro-purchase thresholds, tendering and approval and other compliance issues.
World Trade/Interactive
