context: Government procurement now runs to C¥3.3 tn, 2.4 percent of GDP. The law's target is the procurement conduct of governments, above all local governments, which have long favoured local firms and set implicit barriers against out-of-province suppliers, producing a 'beggar-thy-neighbour' market fragmentation that is among the main obstacles to a unified national market. This first major overhaul of the 2002 law centres on curbing that local protectionism and discrimination, breaking down inter-provincial and regional barriers. Worth noting is an internal tension: the draft both demands 'removing hidden barriers' and equal treatment, and retains 'strengthening procurement's policy functions', allowing procurement to favour chosen sectors. Balancing fairness against industrial support is the key.
A revision to the Government Procurement Law received its first reading at the 14th NPC (National People's Congress) Standing Committee's 23rd session on 23 June. The draft, with ten chapters and 104 articles, brings scattered small purchases outside the centralised catalogue into scope, builds a whole-process management mechanism led by procurement requirements and targets hidden barriers
- background data
- national government procurement grew from C¥100.96 bn in 2002 to C¥3.3 tn in 2025
- rising from 0.8 percent to 2.4 percent of GDP, saving C¥4.7 tn in fiscal funds cumulatively
- main revisions
- adjusting the law's scope, strengthening policy functions, reinforcing whole-process management, improving transaction rules, perfecting fair-competition mechanisms, strengthening oversight and institutional anti-corruption
- expanded scope
- the current law's scope is narrow, with a supervision gap for small, scattered purchases using budgetary funds
- scattered purchases outside the centralised catalogue and below the threshold are brought into scope, under a simplified procurement regime
- whole-process management
- addressing problems of process-over-outcome, unclear requirements, weak contract enforcement
- led by procurement requirements, reinforcing the procuring party's primary responsibility
- removing hidden barriers
- addressing discriminatory treatment of suppliers and high institutional transaction costs
- reducing burdens on market entities
- attributed comment
- Hao Peng 郝鹏 NPC Financial and Economic Affairs Committee deputy chair (presenting the explanation) said the draft 'balances fairness and efficiency' and 'clarifies responsibilities'
- Wang Zecai 王泽彩 Chinese Academy of Fiscal Sciences researcher said the draft 'aids the unified national market and high-standard opening-up'