On July 15, the Chinese Ministry of Finance (MOF) released for public comment the second draft revision of the Government Procurement Law (GPL) of the People’s Republic of China. The American National Standards Institute (ANSI) encourages members and other U.S. stakeholders to review the announcement and, if appropriate, submit comments following the instructions on the Chinese Ministry of Finance website before the deadline of Sunday, August 14, 2022.
According to MOF, this latest revision aims to resolve the deficiencies in practice from the current version, and to create a market-oriented and international business environment following the requirement of deepening reforms and building a unified national market. It stipulates the government procurement’s participants, supporting policies, demand and supplier management, methods and procedures, contract management, dispute handling, supervision and inspection, and legal responsibilities. This call for comment allows relevant stakeholders to provide input for the further reform of the GPL.
The GPL was originally published on June 29, 2002, and took effect on January 1, 2003, with minor revisions throughout the years. The previous solicitation of public comments on the draft revision was launched in December 2020, and this is the second solicitation after incorporating the varied comments and suggestions collected since. The associated Implementing Regulation of the GPL was promulgated on December 31, 2014, and took effect on March 1, 2015.
According to ANSI’s initial review, this draft added text that supports indigenous innovation (Article 25) and small businesses (Article 26) and the establishment of a national security investigation system (Article 24). It also emphasizes the preference for domestic products by requiring that “government shall procure domestic goods, projects, and services unless it is not available within China or cannot be obtained on reasonable commercial terms” and “if the products produced in China meet the specified value-added ratio and other conditions, they shall enjoy the evaluation preference in government procurement activities” in Article 23. This may have significant impacts on foreign companies that rely heavily on government procurement.