CCCEU Note: China's recent policies ensuring fair involvement of both domestic and foreign enterprises in government procurement and promoting foreign investment

In October 2022, China's National Development and Reform Commission (NDRC) and five other ministries issued the document Promulgation of the Several Policies and Measures for Expanding the Increment, Stabilizing the Stock and Improving Quality of Foreign Investment with Emphasis on Manufacturing Sector (CN, EN), which underscored investment promotion activities targeting key industrial chains such as healthcare.

In August 2023, China's State Council released The Opinions of the State Council on Further Optimising the Foreign Investment Environment and Intensifying Efforts to Attract Foreign Investment (the "Opinions) (CN, EN), emphasising the guarantee of national treatment for foreign-invested enterprises. Regarding government procurement, the opinions stressed safeguarding the participation of foreign-invested enterprises in government procurement activities in accordance with the law. Introduce relevant policy measures as soon as possible to further clarify the specific standards for "produced within China." Innovate cooperation and procurement methods, support foreign-invested enterprises to innovate and develop globally leading products in China through measures such as first-time purchasing.

In March 2024, China's Vice Minister of Finance Liao Min emphasized that in government procurement, products and services from both domestic and foreign enterprises are treated with equal fairness, and any regulations or practices that discriminate against foreign enterprises are being rectified(CN, EN). Simultaneously, efforts are concentrated on engaging in dialogue with foreign investors and enterprises to address any practical challenges they face in areas such as government procurement, corporate taxes, and fees. A dedicated mechanism is in place for this purpose, ensuring that all received information is promptly investigated and resolved.

On 2 April 2024, a total of 8 Chinese ministries including the National Development and Reform Commission, the State Administration for Market Regulation, jointly issued Order No. 16 of 2024, titled "Rules for Fair Competition Review in Tendering and Bidding," (CN, EN) which will officially come into effect on May 1st, 2024. The Rules is the first departmental regulations for fair competition review in specific fields and industries. In the section outlining the review criteria, the new regulations explicitly state that operating entities shall not be required to establish branches in the region, pay taxes and social security, or form consortia with local operating entities. Different regions or forms of ownership of operating entities shall not be subjected to varying credit evaluation standards for qualifications, eligibility, performance, etc. Furthermore, scoring differences based on the origin of the bid products by operating entities are prohibited.

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