Latest News:  
Beijing   Sunny/Cloudy    29 / 16 ℃  City Forecast

Home>>China Business

MOF measures 'not against WTO'

By Song Shengxia (Global Times)

08:10, May 24, 2012

New Ministry of Finance (MOF) regulation encouraging central government agencies to procure domestic products do not violate World Trade Organization (WTO) rules, but the government will expand the list to include products made by foreign-invested companies in the country to avoid dampening their business sentiment, Chinese analysts said yesterday.

"The new provisions by the country's finance ministry which encourage central government agencies to buy domestic products, strictly speaking, do not break WTO rules at the current stage because China has not joined the framework of the WTO's Government Procurement Agreement (GPA) and thus is not covered by the restraint of the framework which requires members to treat all products equally," Tu Xinquan, associate director of the China Institute of WTO Studies, told the Global Times.

"But even for GPA members such as those in the EU, the cross-border procurement only takes up a very small portion. More often European businesses set up factories in foreign countries and seek to participate in the local public procurement market through these factories," he said.

The MOF announced Tuesday new rules on managing government procurement which prohibit government agencies whose expenditures are covered under the central budget from purchasing luxury office supplies.

The rules require such government agencies to support energy-saving and environmentally-friendly products and buy copyrighted software.

The rules also restrict procurement of imported products and prohibit purchase of imported products that belong to the categories in which domestic industries are fully developed.

Government agencies that need to buy a good number of imported products should set up an in-house review panel system to check applications for the purchase of imported items, the rules said.

The tricky thing is how to define domestic products, Tu said. There are rules which define domestic products as those with over 50 percent of value-added content from China. But defining specific domestic products according to the rules is too complicated and time-consuming in practice, adding to the procurement cost, he noted.

"My suggestion is to expand the scope of domestic products to include all products produced and assembled in China, including those made by foreign-invested companies, to avoid blocking them in China," he said.

Lin Zhe, an anti-corruption expert at the Party School of the CPC Central Committee, said the new rules are appropriate measures to curb extravagant spending by some government agencies.

"But there should be specific provisions to make government procurement tendering more transparent to allow public supervision," she said. Government agencies should also give more consideration to small businesses in public procurement to avoid monopoly of large companies, she noted.

The value of government procurement reached 900 billion yuan ($142 billion) in 2011 and is expected to exceed 1 trillion yuan this year, Su Ming, deputy director with the Research Institute for Fiscal Science under the MOF, said in February.


Leave your comment0 comments

  1. Name


Selections for you

  1. Marginal weather flight training

  2. Preview of jewelry auction held in Hong Kong

  3. Longmen Grottos reassessed as national 5A scenic spot

  4. Animal Photography: Portraits of endangered species

Most Popular


  1. What is the US' aim behind arms sales to Taiwan?
  2. Investment-driven growth no longer a viable option
  3. Summit can't stop NATO from being marginalized
  4. Easing liquidity not a cure-all
  5. As Beijing remains mum, trade relationships suffer
  6. Intentions behind Japanese right-wingers’ collusion with ‘World Uyghur Congress’
  7. Real intentions of US exercise in Middle East
  8. Short-term trade recovery expected to elude China
  9. Stronger policies needed to push dividend payouts
  10. US, China must co-op to defuse confidence crisis

What's happening in China

Int'l Exhibition on Police Equipment held in Beijing

  1. A blind woman's talent for words
  2. Hunan food poisoning sickens over 100 students
  3. Majority of companies expecting to see profits
  4. Wireless network to cover schools in Shanghai
  5. Seven trapped in SW China mine accident

China Features

  1. High ticket prices, unaffordable landscapes
  2. Huangyan tensions
  3. 2012 Russia-China joint naval exercise
  4. 2nd Beijing International Film Festival
  5. Auto China 2012

PD Online Data

  1. Spring Festival
  2. Chinese ethnic odyssey
  3. Yangge in Shaanxi
  4. Gaoqiao in Northern China
  5. The drum dance in Ansai