China launches New Procurement Policy to boost domestic and global businesses to foster a competitive domestic market.
China has unveiled a groundbreaking policy aimed at strengthening its domestic economy by granting locally made products a 20% price advantage in government procurement bids, regardless of the manufacturer’s ownership. Announced by the Ministry of Finance, the policy marks a strategic shift toward boosting internal demand, supporting local industries, and ensuring equal access for state-owned, private, and foreign-invested enterprises operating within China.
The policy emphasizes fair treatment for all businesses producing locally. According to the Ministry’s draft document, state-owned enterprises, private companies, and foreign investors will be equally eligible for procurement contracts if their products are made in China. This inclusive strategy reflects China’s broader vision of economic openness while promoting localized production to reduce reliance on global supply chains. By applying a price deduction mechanism during bidding evaluations, the government is effectively enhancing the competitiveness of domestic producers without compromising transparency.
Economists and industry experts have lauded this move as a pro-business reform that balances China’s dual goals of economic growth and trade resilience. As Zhu Tian, an economics professor at the China Europe International Business School, noted, the policy reassures both foreign and private businesses about their market prospects within China. Amid global economic uncertainties and shifting trade dynamics, the new rules encourage companies to adopt the “in China for China” model, focusing on local production and services tailored for Chinese consumers.
The timing of the policy is particularly strategic. Amid mounting trade barriers, tariffs, and export tax adjustments, many businesses are reorienting their operations toward the Chinese domestic market. In 2023 alone, 74% of procurement orders, totaling 2.52 trillion yuan (US$466.6 billion), went to small- and medium-sized enterprises, illustrating the government’s focus on inclusive economic development. By strengthening domestic procurement rules, Beijing is signaling long-term stability and market confidence for businesses navigating an evolving global trade environment.
China’s proactive measures are expected to stimulate technological innovation, job creation, and market expansion. As global investors and enterprises integrate further into China’s economic ecosystem, the country is positioned to emerge stronger, with a self-sustaining industrial base that drives both domestic prosperity and international cooperation. With these comprehensive policies in place, China is reinforcing its leadership in shaping a more resilient, inclusive, and innovation-driven global economy.
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