Tuesday, December 29, 2009
Same Old Story on Chinese State Procurement
The petition earlier this month by an assortment of business associations from North America, Asia and Europe protesting the not actively circulated circular (Notice No. 618) issued jointly by China's Ministry of Finance, Ministry of Science and Technology and the National Development and Reform Commission (link here) is just howling at the moon. This notice just lays out formally one more way that China tries to steer procurement towards domestic companies. And there is not much foreign companies and countries can do as China is not a signatory to the WTO's Agreement on Government Procurement. But since China's state procurement from foreign companies was quite small to begin with, there may not be much for foreign firms to worry about. China has used procurement as one of many industrial policy tools to try to promote local technology. The recent announcement by MIIT setting inter-network fees for TD-SCDMA (the "indigenous" mobile technology) subscribers at half the rate for subscribers using other technologies just goes to show how anxious China is to think up news ways to promote domestic firms and technology and continue old ones like procurement.