China Aims to Boost Government Purchases from SMEs and Green Sectors, Using Digital Technology to Curb Local Protectionism
China’s State Council has unveiled a three-year action plan to enhance government purchases from small and medium-sized enterprises (SMEs) and green sectors, with a focus on leveraging digital technology to standardize procurement processes and reduce local protectionism. The plan aims to boost private sector confidence by increasing the share of purchases from SMEs in projects exceeding 4 million yuan (US$550,000).
The initiative also includes creating channels to share procurement information with financial institutions to facilitate loan support for SMEs, as well as addressing irregular behaviors such as discriminatory terms and bid rigging. This move comes as Beijing seeks to restore confidence among SMEs following strict regulations affecting various private sectors since 2021.
By promoting more purchases from SMEs and green sectors, China aims to support struggling private enterprises and advance its low-carbon, green development goals. The government’s commitment to enhancing procurement practices reflects a crucial step towards fostering a more inclusive and competitive market environment.