Foreign tech vendors have written to Chinese leaders about “restrictive and discriminatory” new procurement rules that they say will make it almost impossible for non-Chinese firms to win government contracts.
A group representing US, Japanese, European and Indian businesses has said it is “deeply troubled” by a circular issued November 15 setting up “an Indigenous Innovation Product Accreditation system.”
The group of 34 organizations, including the American Chamber of Commerce, the Business Software Alliance, the Semiconductor Industry Association, the Information Technology Industry Council and NASSCOM, has written to Science and Technology Minister Wan Gang, Finance Minister Xie Xuren and NDRC chairman Zhang Ping.
The new rules, posted on a government website in October but not widely circulated, require all firms to obtain accreditation by December 10 in order to be eligible for public sector contracts.
The letter said that apart from the “unworkable” timeframe for accreditation, “the very restrictive and discriminatory program criteria would make it virtually impossible for any non-Chinese supplier to participate—even those non-Chinese companies that have made a substantial and long-term investments in China.”
It said the notice “departed markedly” from global practices in stipulating that intellectual property be developed and owned in China, and that any trademarks should be originally registered in China.
“By contrast, quality, performance and value are given only a minimal role,” it said.
“The result will be less efficient and more costly purchases of innovative products and services by the Chinese government and a slowing of the very technological development that China is pursuing.”
Additionally, the program would “dilute, if not effectively nullify” China’s commitment at the July US-China strategic economic dialog that its procurement policies would open to foreign-invested enterprises, the letter said.
The Wall Street Journal said while the size of Chinese government ICT purchases was unclear, total public procurement was worth 599.09 billion yuan ($87.7 billion) in 2008, more than triple the amount in 2003, according to Ministry of Finance figures.