Tuesday, February 12, 2008

Government Procurement in China Hits Record

by Richard York

The Chinese government procurement reached new heights in the year that concluded and the procurement by the government stood at about 400 billion Yuan which is $55.6 billion. The procurement of services and goods of China in the previous year had stood at 368.1 billion Yuan. These were the preliminary figures that were released by the Ministry of Finance in China. The Chinese assistant financial minister Zhang Tong termed this expansion in the procurement as remarkable because when the mechanism was introduced in the year 2002 the procurement figures stood at a meager 100 billion Yuan. The government consumption in the past five years has expanded in different areas the financial minister added; the procurement began from simple commodities to services and engineering procurements. There are as many as 13,000 individuals who deal with purchasing all over the world. The Chinese government has revised its procurement list for two times and now it included 18 categories with items amounting to 4,770.

In the revised list of the government procurements there was a large share of energy saving products. The government initiative in this regard has planned to decrease the consumption of energy for every 10,000 Yuan of the GDP by as much as 20% and it also has planned to reduce pollutants by 10% for the period that extends from 2006 to2010. The Chinese financial minister Xie Xuren also said that for the current year textbooks for the primary and the junior schools as also farm equipments, medicines, and other items will be included in the government procurement list so that they can be distributed free or at relatively cheap prices among the poor and needy in the country. The Chinese Ministry of Finance also issued a directive which stated that the procurement list of the government will have preference for innovation products that are independently developed. This move by the Chinese government seems the same which was taken to by the United States in the year 1950 to boost high tech industries in the country that included computing, aeronautics, integrated circuits, and semiconductors.

Yu An professor of law at the Qinghua University opined that this initiative by the government would work as incentives so that the domestic companies in the country can work speedily on their technological innovations. The statistics revealed by the Chinese MOF indicate that the procurement secured a total spending of 180 billion Yuan from 2002 and 2007. Given the benefits of the government procurement it had some sections of the nation grumble that mainly included Revolutionary Committee of the Chinese Kuomintang’s Heilongjiang provincial chapter which is among the one of the nation’s political parties. The Heilongjiang provincial chapter asked for enhancement in the transparency of the government procurement because some of the products in the procurements were overcharged and also the quality of the products was found to be unsatisfactory and also did not offer an efficient after sales service. The chapter also emphasized that the companies who supply the products should be subjected to real time supervision of the products so that bribery and other malpractices can be avoided.

 

 

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