(Source: "Political Observation" 2025-11-06)
Currently, our country is at a critical stage of building a modern industrial system and promoting institutional openness. Government procurement is an important link between public demand and industrial development. The setting of "domestic product standards" is not only related to the efficiency of the use of fiscal funds, but also affects the three core issues of industrial chain security, fair market competition and the connection with international rules. From the revised draft of the "Government Procurement Law" focusing on product identification standards to the 20% price review discount proposed by the Ministry of Finance, every step of exploration at the policy level requires finding a precise balance between "supporting local industries" and "maintaining an open image." How to make domestic product standards become a help in solving the "stuck neck" problem without deviating from the direction of marketization and internationalization?
As the host and researcher of the "Political Observation_People and Voices" column, He Yilai has always paid attention to the policy frontiers and practical pain points in the field of government procurement. He knows that the answers to these questions urgently require the guidance of authoritative experts who have both in-depth research on international rules and practical experience in domestic policies. To this end, this column specially invites leading scholars in the field of my country's government procurement and global economic and w88 rules: Professor Tu Xinquan, the dean, professor and doctoral supervisor of the China WTO Research Institute at the w88 casino, the host of the World w88 Organization Chair Project, and the foreign w88 expert of the Economic and w88 Policy Advisory Committee of the Ministry of Commerce, to analyze this core topic with us.
As a think tank expert in the negotiation of China's accession to the Government Procurement Agreement (GPA), Professor Tu has long been engaged in research on the connection between government procurement system design and international rules: he presided over the National Social Science Fund project "Research on my country's Accession to the GPA Negotiation", constructed the "institutional boundary" theory of the opening of China's government procurement market, and proposed the "opening up to promote reform" path to provide reference for the formulation of GPA negotiation strategies; he has led more than 80 government procurement related topics commissioned by the Ministry of Commerce and the Ministry of Finance, from From "Categorized Management of State-owned Enterprise Procurement" to "Domestic Product Identification Standards", a number of results were submitted to the central government through the National Social Science Fund's "Achievements Report", providing important evidence for the revision of the "Government Procurement Law".
At the same time, as the Secretary-General of the Global Economic and w88 Governance Research Network, he has established a dialogue platform for Chinese and foreign government procurement rules to provide professional support for Chinese companies to deal with overseas "local preference" barriers. This accumulation of "international rules research (GPA negotiations, global governance) + local policy practice (topic demonstration, legal revision) + industrial service transformation (enterprise support, platform building)" allows his interpretation of "government procurement standards for domestic products" to anchor policy pain points based on national conditions and provide a feasible path to connect with a global perspective. Next, let us have an in-depth conversation around this issue.
1. Strategic significance and policy basis: the connection between international rules and local practice
Host: Professor Tu, in recent years, my country has emphasized its support for domestic products in government procurement. Currently, the revision of the "Government Procurement Law" is being advanced, and my country is also actively participating in GPA negotiations. How does the formulation of this policy take into account international rules and domestic practice?
Tu Xinquan:Government procurement is not only a fiscal expenditure tool, but also the carrier of national development strategy.
From the perspective of policy basis, the connection between international rules and domestic practice is the core consideration. At the international level, the GPA itself reserves policy flexibility for member states, allowing them to retain autonomous space in areas such as national security and environmental protection. my country has always adhered to the principle of "categorized management and clear boundaries" in GPA negotiations. For example, for state-owned enterprise procurement, it clearly distinguishes between "government purposes" (such as undertaking public services) and "commercial purposes" (such as market-oriented operations) to avoid being misunderstood as market discrimination due to vague definitions. This is not only in line with the spirit of GPA rules, but also protects the security of procurement in key areas of our country.
From the perspective of domestic practice, the revised draft of the "Government Procurement Law" is working hard to fill the gap in standards. It plans to add clear provisions for the identification of domestic products, which not only avoids "one size fits all", but also draws on international experience but does not copy it. For example, although the U.S. "Buy American Act" has detailed proportion requirements, it places too much emphasis on country-specific attributes; my country's revision is based on industrial realities and combines standards such as "component cost proportion" and "key processes" with industrial chain safety needs to make the rules more in line with the complex national conditions of China's manufacturing industry.
Host: In line with the “steady expansion of institutional opening-up” emphasized in the communiqué of the Fourth Plenary Session of the 20th CPC Central Committee, the Ministry of Finance plans to grant a 20% price review discount to domestic products. What is the background and core logic of this policy?
Tu Xinquan:This policy is an inevitable choice for my country’s government procurement system reform to enter the deep water zone. The core logic is reflected in three aspects:
First, improve the system to make up for the shortcomings and solve the problem of lack of operational standards in the "Government Procurement Law" principle of "preferential procurement of domestic products";
The second is industry-oriented support, through policies to guide the flow of resources to "stuck" areas such as high-end manufacturing and core components, echoing the goal of "building a modern industrial system";
The third is to balance openness and autonomy, clarifying that "domestic and foreign-funded enterprises producing products in China enjoy equal preferential treatment", which not only avoids suspicion of discrimination, but also reserves space for docking with GPA and CPTPP.
2. Standard design: gradient, inclusiveness and dynamic mechanism
Manager: The policy defines domestic products from three aspects: "domestic production", "component cost proportion" and "key process requirements". What innovations are there in this standard system? How to ensure that standards adapt to industry changes?
Tu Xinquan:This standard system reflects the dual consideration of “Chinese characteristics and international standards” and has three innovation points:
1. Gradient design, distinguishing general products (focusing on cost ratio) and specific products (increasing key components/process requirements), such as strengthening local production requirements for battery components in the new energy vehicle field to meet the needs of industrial upgrading;
2. Inclusive orientation, transform "nationality standards" into "production standards", foreign-funded enterprises can enjoy preferential treatment for products in China, and implement the requirement of "equal participation of all business entities";
3. Dynamic management requires the establishment of a "dynamic list mechanism" - for areas involving national security such as chips and high-end medical equipment, a positive list is used to clarify the proportion of localization, and then adjustments are made based on technological breakthroughs (for example, the discount will be reduced after a certain chip achieves 7nm localization), which not only solves practical problems but also improves policy transparency.
Manager: At the implementation level, what specific suggestions do you have for the key area of state-owned enterprise procurement?
Tu Xinquan:It is necessary to promote the reform of the procurement classification of state-owned enterprises: the procurement of commercial state-owned enterprises operates entirely in accordance with market rules, and domestic product preferences are not mandatory; the procurement of public welfare state-owned enterprises (such as those responsible for public transportation and medical services) is included in the government procurement supervision system to avoid the alienation of preferences into "local protection." This reform needs to be promoted simultaneously with the three-year action of "rectification, construction and promotion" of government procurement launched in 2024 to jointly rectify differential treatment and ensure fair implementation of policies.
3. International Benchmarking: Compatibility of Domestic Product Policies and GPA/CPTPP
Manager: Is the 20% price review range reasonable? How to improve efficiency and avoid risks through "performance orientation" during implementation?
Tu Xinquan:From the perspective of international practice, many countries balance industrial support and market fairness through differentiated preferential policies - Canada provides 10%-25% discounts for local products, Japan achieves similar effects through the "minimum purchase ratio", and my country's 20% range is within the internationally accepted range and does not break through the WTO framework. From the perspective of domestic practice, this range can effectively guide procurement decisions without excessively distorting market competition, and is a calculated and reasonable range.
To improve efficiency, we need to focus on "performance orientation": we should not only focus on "whether to purchase domestic products", but also pay more attention to "whether procurement promotes innovation" - for example, for domestic products that use independent patented technology, an additional evaluation score can be added on the basis of a 20% price discount; for projects that can stimulate small and medium-sized enterprises to support supporting projects after procurement, the supply chain driving effect should be included in the evaluation indicators. At the same time, it needs to be combined with the abnormally low-price bidding pilot in 2025 to prevent companies from lowering product quality to enjoy discounts and truly achieve a win-win situation of "value for money" and "support for innovation."
To avoid risks, you must keep two bottom lines:
1. The principle of non-discrimination, it is strictly prohibited to restrict the place of brand registration and the country of investors;
2. Connect with international rules and gradually optimize standards based on the progress of GPA negotiations. For example, for procurement projects covered by GPA, adjust the preferential range with reference to international rules, embodying the idea of “promoting reform through opening up”.
4. Balance mechanism: coordination of policy functions and market attributes
Host: The Fourth Plenary Session of the CPC Central Committee proposed “improving the market-based allocation mechanism for public resource transactions.” How to balance the “guidance” of domestic product policies and the “marketness” of government procurement? What significance does this have for the construction of a unified market?
Tu Xinquan:The two are not antagonistic. The key is to establish a balanced mechanism of "market foundation + policy guidance + regulatory guarantee".
Mechanism design: It is necessary to clarify the boundaries of policy application - focus preferential policies on manufacturing products, and focus on fair competition in service projects; strengthen local requirements in areas involving national security, and weaken intervention in the field of consumer goods with full competition.
Execution level: Promote the linkage design between demand standards and domestic product standards, avoid specifying brands in disguise through vague requirements, and use digital procurement platforms to improve transparency, such as accurately locating the country's advantageous industries through big data analysis, and announcing procurement results and localization ratios in real time.
Regulatory dimension: Establish a dual evaluation system of "policy effectiveness - market impact", which not only tracks the effect of preferential policies on local production, but also monitors whether there is competition suppression. The evaluation results are directly used for standard adjustment, forming a closed-loop management.
This balance is of great significance to the construction of a unified market: unified domestic product standards can eliminate the "hidden thresholds" set by local governments and promote cross-regional flow of factors; equal policy application (including fair participation after the classification reform of state-owned enterprises) can break ownership discrimination and allow state-owned enterprises, private enterprises, and foreign enterprises to compete on the same platform, in line with the requirements of the Fourth Plenary Session of the Fourth Plenary Session of "Building a unified, open, competitive and orderly market system."
5. International Perspective: Dealing with Frictions and Participating in Global Governance
Manager: When Chinese companies explore the global public procurement market, they often face "local preference" barriers such as Huawei's rejection in Australia. Will my country's introduction of domestic product policies trigger counterattacks? How to build a two-way open pattern of “bringing in” and “going out”?
Tu Xinquan:This concern requires distinguishing the essential difference between "compliance policies" and "discriminatory barriers" - my country's policies are in line with the basic principles of the WTO's Government Procurement Agreement, but cases such as Huawei being rejected in Australia and the United States restricting Chinese battery components from participating in subsidy projects are essentially double standards that politicize procurement policies, which is the root cause of w88 frictions.
Building a two-way open pattern requires a two-pronged approach of “internal reform” and “external coordination”:
Domestic: Link domestic product policies with “opening up international public procurement” – Chinese companies currently only account for 1.3% of the global public procurement market. Government procurement can be used to force companies to improve quality standards (such as complying with technical specifications of United Nations procurement and EU government procurement), avoid “working behind closed doors”, and aim to achieve a breakthrough in share from 1.3% to 3%;
Externally: Break down barriers with rules negotiation and safeguard rights and interests with countermeasures - In the GPA negotiations, my country's "production standards" model is used as a bargaining chip to promote the elimination of discriminatory procurement policies based on "country" in Europe and the United States; countermeasures are reserved in domestic laws, and for countries that implement unfair procurement restrictions, the participation treatment of their products in my country's government procurement will be adjusted accordingly. This is a reflection of the principle of reciprocity.
What’s more important is to proactively participate in global public procurement governance: As a major manufacturing country, my country can promote the inclusion of “supply chain resilience” into international procurement rules, which not only safeguards the rights and interests of Chinese enterprises, but also contributes Chinese solutions to global public procurement, echoing the requirements of the Fourth Plenary Session of the Central Committee of the Communist Party of my country to “promote changes in global economic governance.”
6. Challenges and Prospects: Standardization, Legalization and Internationalization
Host: Under the guidance of the spirit of the Fourth Plenary Session of the Central Committee of the Communist Party of my country, what is the future direction of improvement of our government’s policy on purchasing domestic products? What role will it play in building a “new high-level open economic system”?
Tu Xinquan:Policy improvement needs to be promoted in the three directions of “standardization, legalization, and internationalization”:
Standardization: Accelerate the establishment of cost ratio databases by industry. For example, electronic information products refer to internationally accepted value chain accounting methods, equipment manufacturing products refine standards in conjunction with the "first set" policy, and at the same time deepen dynamic list management to make standard adjustments more accurate;
Legalization: Elevate mature practical experience such as dynamic lists, performance-oriented, and classified procurement of state-owned enterprises into legal norms. For example, in the revision of the "Government Procurement Law Implementation Regulations", the identification procedures and dispute resolution mechanisms for domestic products are clarified, so that policy implementation has a legal basis;
Internationalization: Achieve "two-way mutual recognition" - on the one hand, make my country's standards compatible with international rules, on the other hand, promote the "Belt and Road" countries to recognize my country's product certification system, and expand market space through mutual recognition of rules.
In a larger sense, this policy is a "test field" for institutional openness: it not only achieves industrial policy goals through price concessions, but also maintains market fairness through equal application; it is based on local production realities and is in line with internationally accepted rules. This kind of "both internal and external" system design is my country's vivid practice of shifting from "opening based on the flow of goods and factors" to "opening based on rules and regulations" and will provide important support for the construction of a new system for a high-level open economy.
Manager: Thank you very much Professor Tu for your in-depth explanation. From policy basis to implementation path, from risk response to future prospects, your analysis is both based on local reality and has a global perspective, giving us a more comprehensive understanding of the government's policy on purchasing domestic products. As the Fourth Plenary Session of the Central Committee of the Communist Party of China emphasized, openness and autonomy are not opposites, but an organic whole that complements each other. This interview ends here. Thank you readers for your attention.
[Conclusion]
In this exclusive interview,Professor Tu XinquanBased on "international rule convergence" and "local practical needs", it provides a path with both theoretical depth and practical value for the implementation of domestic product standards for government procurement: from dynamic list management to state-owned enterprise classified procurement, from performance-oriented review to global governance participation, every suggestion is closely linked to the core proposition of "openness and independent balance". Tu Xinquan emphasized that the key to a successful policy lies in balancing openness and security: “Reducing market uncertainty through clear rules and turning government procurement from a ‘zero-sum game’ to a ‘win-win platform’ is the deep logic of China’s institutional openness.”
In the process of my country's promotion of high-level opening up to the outside world, the government's policy of purchasing domestic products is not only a "booster" to support industrial upgrading, but also a "touchstone" to test the quality of institutional openness. In the future, as the revision of the Government Procurement Law accelerates and GPA negotiations advance, this policy will continue to be iteratively improved, injecting more momentum into building a modern industrial system and creating a unified and open market environment.
Attachment: Original link
http://www.ccgp.gov.cn/llsw/202511/t20251106_25642510.htm
