China to give its firms a procurement boost before Trump return

CHINA will give products made in the country a price advantage in government procurement, a step likely aimed at helping domestic manufacturers weather possible tariff hikes by the US.

Made-in-China goods will be listed at prices 20 per cent lower than the actual sales figure when they are considered alongside products made abroad, according to a draft rule published on Thursday (Dec 5) by the Ministry of Finance, which is seeking public feedback. The government generally puts draft rules into effect after formalities are sorted.

The goods would still be sold to the government at full price. To qualify as domestically made, a product must contain a certain proportion of components made in the country, according to the draft rule. Companies would have to ensure key manufacturing procedures for certain items were done in the nation.

The move seems intended to help domestic manufacturers facing a second trade war with the US given president-elect Donald Trump has threatened to impose higher levies on Chinese goods. Those tariffs could dent the outlook for exports, which have been an important growth driver for the Chinese economy since the pandemic ended.

Beijing has pushed for technology self-reliance in the face of growing curbs from the US. That has encouraged government agencies and state-owned companies to switch to domestic companies in areas such as computers.

Many foreign firms have long complained of discrimination in public procurement and a lack of clarity on the exact definition of Made in China. BLOOMBERG