China targets unified, open natl market

China has issued a regulation on implementing domestic product standards and related policies in government procurement, a move that experts say will help foster a first-class business environment that is market-oriented, law-based and internationalized.

Shu Wenqi, deputy director of the China Institute for Urban Development, said building a unified, open and orderly competitive government procurement market is both an essential component and an inevitable requirement for developing a unified national market.

The General Office of the State Council has newly released the Notice on Implementing Domestic Product Standards and Related Policies in Government Procurement, aiming to ensure equal participation of all types of business entities in purchasing activities.

Taking effect on Jan 1, 2026, it clarifies that the domestic product standard refers to products manufactured within China, with the proportion of the cost of components produced domestically reaching a prescribed threshold. For some products, key components and critical processes must also be manufactured or completed within China.

The notice prohibits designating brands, restricting the place of brand registration or ownership, and imposing differential conditions based on ownership type, organizational form, equity structure or nationality of investors. All regions and departments shall strengthen coordination and refrain from issuing measures that contravene the notice.

Shu noted that the notice is a concrete expression of high-level opening-up and equal treatment of State-owned, private and foreign-invested enterprises.

The standard applies to goods procured under both goods and service projects. In evaluations, a 20 percent price preference shall be granted to domestic products over nondomestic products. Supportive policies shall treat enterprises of different ownership types equally.

Tao Qizhi, professor at the Institute of Chinese Financial Studies at Southwestern University of Finance and Economics, said the policy continues to prioritize support for domestic products while ensuring fair participation by enterprises of all ownerships, reflecting the orientation toward a more unified and open market.

This approach echoes President Xi Jinping's call at the Central Financial and Economic Affairs Commission meeting on July 1 to "advance the building of a unified national market in greater depth", demonstrating China's resolute resolve to promote high-quality development and deepen opening-up. It is expected to spur innovation and expand international cooperation, Tao said.

The notice outlines a path for system building and adjustment. As requested by the State Council, within five years from implementation, the Ministry of Finance, together with relevant industry authorities, will extensively solicit opinions from domestic and foreign-funded enterprises and industry associations and chambers of commerce, set a three- to five-year transition period, and gradually establish a domestic product standard system and a dynamic adjustment mechanism for government procurement.

Shu added that China has for years stuck to its goal of achieving unified institutions and rules for government procurement, integrated sharing of government procurement data and resources, and unified regulation and fair competition in the field of government procurement.