A model of an unmanned helicopter is on display at the booth of Shenzhen United Aircraft Technology Co., Ltd, during the Farnborough International Airshow in Farnborough, Britain, July 22, 2024. The 2024 Farnborough International Airshow closed on July 26. Photo: Xinhua

China's centrally administered state-owned enterprises (SOEs) are expected to take the lead in buying innovative products in their procurement management, said a guideline released on Tuesday.

The State-owned Assets Supervision and Administration Commission of the State Council (SASAC) and the National Development and Reform Commission jointly released a guideline that aims to improve the procurement process and the overall supply chain management capacity within the centrally administered enterprises. 

The guideline emphasizes the importance of central enterprises' procurement in supporting science and innovation. 

It calls for central SOEs to lead the way in using innovative products, particularly in key areas such as satellite navigation, chips, high-end Computer Numerical Control (CNC) machine tools, industrial robots and advanced medical equipment.

China's SOEs play a crucial role in driving innovation and the development of new quality productive forces, Hu Qimu, deputy secretary-general of the Digital-Real Economies Integration Forum 50, told the Global Times on Wednesday.

Through their large-scale procurement and market demand, SOEs create massive market opportunities for the application of Chinese cutting-edge technologies. Technology companies can reinvest profits into further research and development (R&D), forming a virtuous cycle that sustains and propels innovation, Hu said.

China has been ramping up its efforts to boost the innovation prowess of SOEs. 

According to the key policy document adopted at the third plenary session of the 20th CPC Central Committee in July this year, China will allow more eligible SOEs to provide diverse medium- and long-term incentives to encourage innovation and creativity among their research personnel, the Xinhua News Agency reported.

China's central SOEs possess robust innovation capabilities and organizational advantages, positioning them as the core drivers of technological ingenuity. 

Among the 2023 Fortune 500 companies, 46 were China's central SOEs. In 2022 and 2023, these SOEs invested more than 1 trillion yuan ($139.18 billion) in R&D, achieving breakthroughs in key technologies across various industries and sectors, according to a report by the Xinhua News Agency.

Over the next five years, central SOEs will allocate more than 3 trillion yuan for large-scale equipment upgrades to keep pace with the new round of the technological and industrial revolution, according to SASAC.

Global Times