China offers SMEs, green sector boost with 3-year action plan to lift government purchases
- Various levels of governments have been urged to boost purchases from small and medium-sized enterprises, which are the backbone of China’s economy
China plans to boost government purchases from small and medium-sized enterprises (SMEs) and green sectors, while also leveraging digital technology to standardise procurement and curb local protectionism, in a bid to elevate private sector’s confidence, according to a three-year action plan issued by China’s cabinet.
The State Council on Thursday called for the various levels of governments to increase the share of purchases from SMEs for projects with a budget exceeding 4 million yuan (US$550,000).
The share for SMEs within a budget would be increased from 30 to 40 per cent, which would be applied for all government procurement until the end of 2026.
In addition, the plan proposed creating a channel to share central government procurement information with financial institutions to enable commercial banks to expedite loan support for SMEs.
It also addressed “irregular behaviours”, including discriminatory terms against certain purchasers and bid rigging by some suppliers.
It reflects the inequality between the state-owned and private sector
The State Council statement came as Beijing seeks to restore confidence among SMEs amid low expectations in the private sector following stringent and abrupt regulations in predominantly private sectors such as real estate, video gaming and off-campus education since 2021.
