Ministry of Finance Photo: VCG

China's Ministry of Finance (MOF) has released on Thursday a draft on standards and policies regarding domestic products in government procurement, including plans to give products made in the country a 20 percent price evaluation preference if they meet relevant standards.

The ministry said it formulated the draft based on international experience and China's own conditions, in order to build a unified, open and competitive government procurement system while fostering a market-oriented and law-based international business environment.

The draft is open for public opinions until January 4, 2025, according to a statement on the MOF website.

The domestic products being considered for government procurement will need to meet three requirements, according to the document.

First, the product must be produced in China, which means transformation of attributes from raw materials to components and products within the Chinese territory, excluding labeling and simple packaging. Second, the production cost of components manufactured within the Chinese territory for a product must reach a certain level, which will be dynamically adjusted according to specific products. Third, on the basis of the first two requirements, for specific products, key components and key production processes should be completed within the Chinese territory.

According to the draft, the standards apply to goods, and mainly to industrial products. Made-in-China goods will be listed at prices 20 percent lower than the actual prices when considered alongside goods from abroad during the government procurement process.

"It is a standard international practice to give domestic products price an evaluation preference in government procurement," Bai Ming, a research fellow at the Chinese Academy of International Trade and Economic Cooperation, told the Global Times on Friday.

The move also underscores China's high-level opening-up as it strengthens national treatment for foreign-funded companies, Bai said.

Based on seeking opinions from various parties including domestic and foreign-funded enterprises and industry associations, the MOF and related government agencies will formulate requirements for the production cost of components within the Chinese territory and the requirements for key components and key processes for specific products in the next three to five years. Prior to this, products will be considered domestic products as long as they are made in the Chinese territory, the MOF said.

Domestic and foreign-funded enterprises will be treated equally under the policy, the MOF said. Whether the products are manufactured by domestic or foreign-funded enterprises, they will enjoy government procurement policy support if they meet the standards, according to the ministry.

The MOF said the standards regarding domestic products and support policies in government procurement are in line with WTO and other international trade rules. After China joins international treaties such as the WTO Agreement on Government Procurement and the Comprehensive and Progressive Agreement for Trans-Pacific Partnership, China will grant exemptions to the products of other members in line with the treaties, the ministry said.