China: Government Rewrites Rules On Procurement

Proving that the Chinese government does listen to the concerns of foreign companies, the Ministry of Science and Technology of China has published the draft of a series of new rules on government procurement and deleted the most controversial provision from an earlier version.

According to the rules that were published in 2009 but were not enforce officially, suppliers should gain product accreditations before being included in the Chinese government's procurement catalog of proprietary innovation products. In addition, all these products must have Chinese intellectual property rights and proprietary brands; and the intellectual property rights of applicants should be completely independent from overseas organizations or individuals.

That means products that do not have Chinese intellectual property or proprietary brands will not be able to enter the procurement catalog of the Chinese government and cannot access to the government procurement market, which is reportedly worth billions of U.S. dollars each year.

This provision also led to a protest of over 30 industry groups from North America, Europe, and Asia, representing the world's major technologies enterprises, who said the rules are protectionist.

In response to the complaint, the Chinese Ministry of Science and Technology's new government procurement draft only requires that products on the government procurement list should be in accordance to the laws and regulations of China; and the applicants should either own or have the rights to use the intellectual property rights of the related products in China.

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