{"id":43267,"date":"2025-01-08T09:19:54","date_gmt":"2025-01-08T09:19:54","guid":{"rendered":"https:\/\/studiozunarelli.com\/2025\/10\/02\/made-in-prc-vs-prc-domestic-product-in-public-procurement\/"},"modified":"2026-02-17T12:00:17","modified_gmt":"2026-02-17T12:00:17","slug":"made-in-prc-vs-prc-domestic-product-in-public-procurement","status":"publish","type":"post","link":"https:\/\/studiozunarelli.com\/en\/made-in-prc-vs-prc-domestic-product-in-public-procurement\/","title":{"rendered":"\u201cMade in PRC\u201d vs \u201cPRC Domestic Product\u201d in public procurement"},"content":{"rendered":"

Last December 05, 2024, The Chinese Ministry of Finance (MOF) published the Draft for opinions on standards and policies regarding domestic products in government procurement<\/strong> (\u5173\u4e8e\u653f\u5e9c\u91c7\u8d2d\u9886\u57df\u672c\u56fd\u4ea7\u54c1\u6807\u51c6\u53ca\u5b9e\u65bd\u653f\u7b56\u6709\u5173\u4e8b\u9879\u7684\u901a\u77e5-\u5f81\u6c42\u610f\u89c1\u7a3f). The new Draft for opinions, designed in accordance with the Government Procurement Law<\/strong> (\u653f\u5e9c\u91c7\u8d2d\u6cd5), the Foreign Investment Law<\/strong> (\u5916\u5546\u6295\u8d44\u6cd5) and other relevant laws and regulations, aims to define domestic products standards in the field of government procurement tenders. The topic has been already discussed in the public notice on the Procurement Law (\u5173\u4e8e\u300a\u4e2d\u534e\u4eba\u6c11\u5171\u548c\u56fd\u653f\u5e9c\u91c7\u8d2d\u6cd5\uff08\u4fee\u8ba2\u8349\u6848\u5f81\u6c42\u610f\u89c1\u7a3f\uff09\u300b\u518d\u6b21\u5411\u793e\u4f1a\u516c\u5f00\u5f81\u6c42\u610f\u89c1\u7684\u901a\u77e5) issued by the Ministry of Finance in 2022, where the document stated that a product can be considered as \u201cdomestic\u201d\u00a0for tender purpose if goods are produced within Chinese territory and meet the specified value-added percentage, so that they can get a preferential channel in procurement. Based on 2022 document, the recent Draft for opinions deepens and clarifies the issue concerning the concept of Chinese domestic product in the field of government procurement.<\/p>\n

What does \u201cChinese domestic product\u201d mean?<\/h3>\n

According to the mentioned Draft for opinions, the product should be \u201cproduced in China\u201d for being considered a \u201cChinese domestic product\u201d. What are the outlines for a \u201cdomestic product\u201d? The main point is how to determine the substantial transformation<\/strong> (\u5c5e\u6027\u6539\u53d8) from raw material to finished good. The product shall be realized within the customs territory of China. Therefore, substantial transformation<\/em> refers to the manufacturing, processing or assembly processes, resulting in a new product completely different from the raw materials and components. As a result, finished goods have new name\uff08\u540d\u79f0\uff09and characteristics (\u7279\u5f81).<\/p>\n

On the other hand, the Draft for opinions specifies that the substantial transformation does not include:<\/p>\n

    \n
  1. operations performed to ensure that the product remains in a certain state during transportation or storage.<\/li>\n
  2. Packaging or presentation of the product for transportation or sale.<\/li>\n
  3. The affixing or printing of logos, brands, signs and other markings for differentiation on the product or its packaging.<\/li>\n
  4. Simple painting, polishing and packaging.<\/li>\n<\/ol>\n

     <\/p>\n

    Which are the key points of the Draft for opinions on standards and policies regarding domestic products in government procurement issued by the Ministry of Finance?<\/h3>\n

    The Draft on standards and policies regarding domestic products in government procurement mainly provides information regarding domestic products in the field of government procurement<\/strong> and the support policy for domestic products<\/strong>.<\/p>\n

    Concerning the standards for domestic products in the field of government procurement, the notice specifies:<\/p>\n

      \n
    1. \u201cThe product must be produced in China<\/strong>\u201d: the so-called substantial transformation \u2013 from raw materials, components to products \u2013 has to be realized in China\u2019s customs territory, excluding labeling, simple packaging and other operations.<\/li>\n
    2. \u201cThe cost of components produced in China should meet specific requirements calculated according to the specified proportion of a formula reported in the Draft\u201d<\/strong> (Cost of components produced in China\/total product cost <\/em>\u2265<\/em> specified rate<\/em>). Components are classified in primary (component that directly composes the product) and secondary (component that directly composes a primary component of the product). If secondary components are produced in China, their cost is included in the cost of the components produced in China. But, if secondary components are not produced in China, their cost is not included. The total product cost will be calculated according to relevant accounting data, purchase contracts and purchase records. Nevertheless, MOF has not yet announced the specified rate.<\/li>\n
    3. On the basis of the foregoing conditions, for specific products, it is also required that \u201cthe key components are produced in China and the key processes are completed in China<\/strong>\u201d.<\/li>\n<\/ol>\n

      Nevertheless, the Draft also specifies that the standard system will be established in stages. According to the Ministry of Finance the standardized system will be established in a step-by-step manner (three to five years to develop the relevant products within China to produce the proportion of the cost of components, as well as the key components and key process requirements for specific products).<\/p>\n

      In reference to the support policy for domestic products, the notice also mentions: \u201cno matter the nature of the manufacturer\u2019s ownership \u2013 will be accorded preferential treatment in Chinese government procurement, including a 20 per cent reduction in bidding price<\/strong>\u201d.<\/p>\n

       <\/p>\n

      Can this policy benefit foreign-owned enterprises?<\/h3>\n

      Yes<\/strong>. The policy behind the Draft, referring to the principle of \u201cfair competition<\/strong>\u201d (\u516c\u5e73\u7ade\u4e89), aims to treat domestic and foreign enterprises equally. Therefore, after the introduction of national product standards and support policies in the field of government procurement, both domestic and foreign-funded enterprises, as long as they meet the standards, can enjoy government procurement support policies.<\/p>\n

      According to the Draft for opinions issued by the Ministry of Finance, PRC promotes local products and empower equal access for private and foreign businesses in order to fully localize their supply chains in Chinese territory.\u00a0 This policy might give foreign-owned enterprises a wonderful opportunity to win more contracts. In the wake of this policy, it is expected that many foreign-owned enterprises will take place entirely in the country.<\/p>\n

      In this context, the distinction between \u201cMade in China\u201d (<\/strong>\u4e2d\u56fd\u5236\u9020<\/strong>)<\/strong> and \u201cChinese domestic product\u201d (<\/strong>\u672c\u56fd\u4ea7\u54c1<\/strong>) <\/strong>can play a very useful role. In recent years, Chinese brands are using the \u201cMade in China\u201d label as a marketing tool to obtain competitive advantage. This trend is deemed a reflection of the growing national consciousness of Chinese society; however, \u201cMade in China\u201d label is more important in terms of its function as marketing tool.\u00a0 The situation is different for \u201cChinese domestic\u00a0products\u201d, not only in the context of government procurement, but also in the procurement of goods such as equipment and machinery.<\/p>\n

       <\/p>\n

      China Desk \u2013 Zunarelli Law Firm <\/em><\/p>\n","protected":false},"excerpt":{"rendered":"

      Last December 05, 2024, The Chinese Ministry of Finance (MOF) published the Draft for opinions on standards and policies regarding domestic products in government procurement (\u5173\u4e8e\u653f\u5e9c\u91c7\u8d2d\u9886\u57df\u672c\u56fd\u4ea7\u54c1\u6807\u51c6\u53ca\u5b9e\u65bd\u653f\u7b56\u6709\u5173\u4e8b\u9879\u7684\u901a\u77e5-\u5f81\u6c42\u610f\u89c1\u7a3f). The new Draft for opinions, designed in accordance with the Government Procurement Law (\u653f\u5e9c\u91c7\u8d2d\u6cd5), the Foreign Investment Law (\u5916\u5546\u6295\u8d44\u6cd5) and other relevant laws and regulations, aims to define domestic […]<\/p>\n","protected":false},"author":1,"featured_media":43268,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"footnotes":""},"categories":[203],"tags":[],"class_list":["post-43267","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-insights"],"acf":[],"yoast_head":"\n\u201cMade in PRC\u201d vs \u201cPRC Domestic Product\u201d in public procurement - Studio Zunarelli<\/title>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/studiozunarelli.com\/en\/made-in-prc-vs-prc-domestic-product-in-public-procurement\/\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"\u201cMade in PRC\u201d vs \u201cPRC Domestic Product\u201d in public procurement - Studio Zunarelli\" \/>\n<meta property=\"og:description\" content=\"Last December 05, 2024, The Chinese Ministry of Finance (MOF) published the Draft for opinions on standards and policies regarding domestic products in government procurement (\u5173\u4e8e\u653f\u5e9c\u91c7\u8d2d\u9886\u57df\u672c\u56fd\u4ea7\u54c1\u6807\u51c6\u53ca\u5b9e\u65bd\u653f\u7b56\u6709\u5173\u4e8b\u9879\u7684\u901a\u77e5-\u5f81\u6c42\u610f\u89c1\u7a3f). The new Draft for opinions, designed in accordance with the Government Procurement Law (\u653f\u5e9c\u91c7\u8d2d\u6cd5), the Foreign Investment Law (\u5916\u5546\u6295\u8d44\u6cd5) and other relevant laws and regulations, aims to define domestic […]\" \/>\n<meta property=\"og:url\" content=\"https:\/\/studiozunarelli.com\/en\/made-in-prc-vs-prc-domestic-product-in-public-procurement\/\" \/>\n<meta property=\"og:site_name\" content=\"Studio Zunarelli\" \/>\n<meta property=\"article:published_time\" content=\"2025-01-08T09:19:54+00:00\" \/>\n<meta property=\"article:modified_time\" content=\"2026-02-17T12:00:17+00:00\" \/>\n<meta property=\"og:image\" content=\"https:\/\/studiozunarelli.com\/wp-content\/uploads\/2025\/10\/Made-in-PRC-vs-PRC-Domestic-Product-negli-appalti-pubblici-1.png\" \/>\n\t<meta property=\"og:image:width\" content=\"602\" \/>\n\t<meta property=\"og:image:height\" content=\"315\" \/>\n\t<meta property=\"og:image:type\" content=\"image\/png\" \/>\n<meta name=\"author\" content=\"AdminZunarelli\" \/>\n<meta name=\"twitter:card\" content=\"summary_large_image\" \/>\n<meta name=\"twitter:label1\" content=\"Written by\" \/>\n\t<meta name=\"twitter:data1\" content=\"AdminZunarelli\" \/>\n\t<meta name=\"twitter:label2\" content=\"Est. reading time\" \/>\n\t<meta name=\"twitter:data2\" content=\"4 minutes\" \/>\n<script type=\"application\/ld+json\" class=\"yoast-schema-graph\">{\"@context\":\"https:\\\/\\\/schema.org\",\"@graph\":[{\"@type\":\"Article\",\"@id\":\"https:\\\/\\\/studiozunarelli.com\\\/en\\\/made-in-prc-vs-prc-domestic-product-in-public-procurement\\\/#article\",\"isPartOf\":{\"@id\":\"https:\\\/\\\/studiozunarelli.com\\\/en\\\/made-in-prc-vs-prc-domestic-product-in-public-procurement\\\/\"},\"author\":{\"name\":\"AdminZunarelli\",\"@id\":\"https:\\\/\\\/studiozunarelli.com\\\/#\\\/schema\\\/person\\\/d1f2e123c03a93d75dd81ca2874dee42\"},\"headline\":\"\u201cMade in PRC\u201d vs \u201cPRC Domestic Product\u201d in public procurement\",\"datePublished\":\"2025-01-08T09:19:54+00:00\",\"dateModified\":\"2026-02-17T12:00:17+00:00\",\"mainEntityOfPage\":{\"@id\":\"https:\\\/\\\/studiozunarelli.com\\\/en\\\/made-in-prc-vs-prc-domestic-product-in-public-procurement\\\/\"},\"wordCount\":908,\"publisher\":{\"@id\":\"https:\\\/\\\/studiozunarelli.com\\\/#organization\"},\"image\":{\"@id\":\"https:\\\/\\\/studiozunarelli.com\\\/en\\\/made-in-prc-vs-prc-domestic-product-in-public-procurement\\\/#primaryimage\"},\"thumbnailUrl\":\"https:\\\/\\\/studiozunarelli.com\\\/wp-content\\\/uploads\\\/2025\\\/10\\\/Made-in-PRC-vs-PRC-Domestic-Product-negli-appalti-pubblici-1.png\",\"articleSection\":[\"Insights\"],\"inLanguage\":\"en-US\"},{\"@type\":\"WebPage\",\"@id\":\"https:\\\/\\\/studiozunarelli.com\\\/en\\\/made-in-prc-vs-prc-domestic-product-in-public-procurement\\\/\",\"url\":\"https:\\\/\\\/studiozunarelli.com\\\/en\\\/made-in-prc-vs-prc-domestic-product-in-public-procurement\\\/\",\"name\":\"\u201cMade in PRC\u201d vs \u201cPRC Domestic Product\u201d in public procurement - 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