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(Jun 25, 2009) China's key economic planner, the National Development and Reform Committee, issued a notice on May 26, 2009, on tightening government supervision of tenders and bids in connection with government-invested projects (FGFG [2009] No. 1362). The notice was jointly issued with eight other central government departments, including the Ministry of Industry and Information Technology, the Ministry of Commerce, and the State Council Legislative Affairs Office. In this notice, the Chinese government orders the purchase of domestic products in government-invested projects. The relevant provisions are as follows:

  • Within the scope of government procurement, government-invested projects must buy domestically when ordering construction projects, goods, or services.
  • Exceptions to this order must be specified by law and may include cases in which the construction projects, goods, or services cannot be obtained, or cannot be obtained by means of "reasonable commercial conditions," within the territory of China.
  • Where buying imported products is really necessary, the purchasing activities must be examined and approved by relevant government authorities in accordance with the state provisions.
  • In projects wholly or partially invested in by the government, directly or indirectly designating the purchase of foreign brand products or their functional parts or limiting the use of domestically made machinery is deemed illegal activity, which is subject to legal liability.
  • The government will also review the tender and bidding rules and regulations, to decide whether there are provisions limiting the use of domestically made products.

(Text of the notice [in Chinese], NDRC Website, available at http://www.ndrc.gov.cn/zcfb/zcfbtz/2009tz/W020090604340199778069.pdf (last visited June 18, 2009).)

Commentators believe that by this order, "China has imposed a requirement for its stimulus projects to use domestically made goods - a move that could strain ties with trading partners after Beijing criticized Washington's 'Buy American' stimulus provisions." (Joe McDonald, Beijing Orders "Buy China" for Stimulus Projects, THE MONITOR, June 17, 2009, available at http://hosted.ap.org/dynamic/stories/A/AS_CHINA_ECONOMY?SITE=TXMCA&S
ECTION=HO ME&TEMPLATE=DEFAULT
.)

Author: Laney Zhang More by this author
Topic: Economics and Public Finance More on this topic
Jurisdiction: China More about this jurisdiction

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Last updated: 06/25/2009