Public procurement and public resource transactions in China have expanded into more sectors over the past two years, with continuous improvements of the relevant trading systems, the China Federation of Logistics and Purchasing (CFLP) said on Wednesday.
Since China issued a new guideline for national public resource transactions at the end of last year, the types of resources that can be traded have gradually increased.
Previously, public resource transactions mainly focused on areas such as construction project bidding, government procurement, and transfer of land use and mining rights.
Under the new guideline, the scope has broadened to public resources, including natural resources, assets and equity, and environmental rights, which are suitable for market-based allocation. For instance, this includes the transfer of income rights from rural collective-owned assets and the sale or lease of state-owned assets in administrative institutions.
Besides, in July, China announced that procurement by state-owned enterprises (SOEs) will be integrated into the national public resources transaction system, which will benefit the overall industrial and supply chains in terms of management and stability.
"Including procurement made by SOEs in the public resources transaction system will give full play to the large-scale purchasing power of these enterprises, promoting the digital and green developments of the transaction system," said Hu Dajian, assistant to the president of the CFLP.
Another notable trend in public procurement is the decline in volume.
In 2023, the total transaction volume of public procurement in China reached 46 trillion yuan (about 6.3 trillion U.S. dollars), down 4.16 percent year on year. The transaction volume in key sectors, such as construction project bidding, government procurement, land use and mining rights transfers, and state-owned asset transactions, decreased by four percent to 21.9 trillion yuan compared to 2022. And this downward trend continued in the first 10 months of 2024.
"In both government and SOE procurement, improving procurement quality and efficiency is the key part. Overexpansion of procurement scale should be avoided; instead, the focus of attention should be on whether the procurement can effectively support economic restructuring, technological innovation, and balanced regional development. While the overall volume of public procurement has decreased, its structure is shifting in a positive direction, with greater support for independent innovation and small and medium-sized enterprises (SMEs)," said Hu.
In the past two years, the annual procurement volume of central SOEs has averaged around 13 trillion yuan (about 1.8 trillion U.S. dollars), benefiting over two million businesses of all sizes across industrial chains.
China's public procurement, resource transaction expand to more sectors
