China cracks down on government procurement irregularities

A new notice outlining aspects of the three-year special rectification campaign against illegal and irregular practices in Chinese government procurement was issued on Monday.

The notice relates to four categories - discriminatory terms against certain potential providers, arbitrary charges by procurement agencies, the provision of false documentation and bid-rigging by providers.

The special rectification campaign began in June last year and is scheduled to run until January 2026. The current phase of the campaign has the stated aim of enhancing the standardization of government procurement market orders, as well as solidifying and broadening the successes of past rectification endeavors.

Jointly issued by the Ministry of Finance, the Ministry of Public Security and the State Administration for Market Regulation, the notice stated that these four types of irregular and illegal practice will remain the focus of this year's efforts to better regulate the government procurement field.

Elements of these practices include procurement entities showing favoritism towards local businesses, specific suppliers or products, or discriminating against suppliers based on unreasonable conditions regarding their place of registration, ownership types, and equity structure of suppliers, and investors' nationality.

Agencies charging fees in violation of regulations and delaying deposit-refunding, and suppliers submitting false testing reports, certification certificates, contract performance records, or declarations of being a small or medium-sized enterprise to secure bids are also mentioned as areas of concern.

The notice added that, over the past year, the special rectification campaign has achieved significant results, with illegal and irregular practices curbed and the business environment for government procurement improved.

The Ministry of Finance, the Ministry of Public Security, and the State Administration for Market Regulation have decided to continue their joint efforts in the special rectification campaign. Each department will take resolute and effective measures to rectify illegal and irregular behaviors, addressing cases as they arise and promoting the continuous improvement of the business environment for government procurement.