Paper 2: Correlation of China’s Government Procurement (Song)

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Paper 2: Correlation of China’s Government Procurement (Song)

  1. 1. Evaluation of the government procurement policy and its correlation of the implementing regulations in China Hefa, SONG ,Rongping, MU Institute of Policy and Management, Chinese Academy of Sciences Add.: NO. 55, Zhongguancun east road, Haidian district, Beijing, P.R.China P. code: 100190 Email: [email_address] Tel.: 8610 62540746 Fax : 8610 62540746
  2. 2. Main contents 1. Introduction 2. Literature review 3. Implementation of China's government policy 4. Correlation analysis between the government procurement policy and the implementation regulations 5. Main recommendations
  3. 3. <ul><li>Outline of the National Medium and Long Term program for Science and Technology Development(2006-2020): </li></ul><ul><li>Government Procurement Favoring Indigenous Innovation. </li></ul><ul><li>Establishing system of financial procurement of the indigenous innovative products </li></ul><ul><li>Improving assessment method of the government procurement and give priority treatment to the indigenous innovative products </li></ul><ul><li>Establishing the system of the government's first-buy of the indigenous innovative products and ordering system </li></ul><ul><li>Establishing the system of the domestic goods and audit system of purchasing foreign products </li></ul><ul><li>Play roles of the defense procurement favoring the indigenous innovation </li></ul>1.Introduction
  4. 4. <ul><li>The Ministry of Finance, Ministry of Science and technology and other departments set down related implementing regulations. </li></ul><ul><li>Administrative regulation on certification of government procurement of the indigenous innovative products. </li></ul><ul><li>Administrative regulation on budget management of government procurement of the indigenous innovative products . </li></ul><ul><li>Administrative regulation on contract management of government procurement of the indigenous innovative products . </li></ul><ul><li>Administrative regulation on assessment of government procurement of the indigenous innovative products . </li></ul><ul><li>Several Opinions on implementing the government procurement policy favoring the indigenous innovation(2010) </li></ul><ul><li>Catalogue for Government Procurement of Indigenous Innovative Products </li></ul>
  5. 5. <ul><li>Edquist, C., Hommen, L.(2000): The government procurement refers to purchasing of a product or system which is not exist and needs further technological development. </li></ul><ul><li>Jakob Edler, Luke Georghiou (2007):The government procurement mainly includes R&D procurement and innovative products procurement. </li></ul><ul><li>Zegveld , Rothwell (1984) Compared the similarities and differences between R&D procurement and innovative products procurement and pointed out that the government procurement could drive innovation in a long-term. </li></ul>2. Literature review
  6. 6. <ul><li>Geroski, P.A considered the government procurement policy is a more effective tool favoring innovation than R&D input. </li></ul><ul><li>Birgit Aschhoff and Wolfgang Sofka found the public procurements more effective, especially for small businesses, and they also studied the problems of public procurements. </li></ul><ul><li>“ Creating an Innovative Europe ”suggested to create an innovation- friendly market. </li></ul><ul><li>Palmberg and Saarinen’s research showed that 48%successful innovation projects made mainly profit from public procurement according to a survey about the commercialization of innovation in Finnish from 1988 to 1998. </li></ul>
  7. 7. <ul><li>From 2007 to 2008, under the leadership of MR.MU, the Center for Innovation and Development Research of Chinese Academy of Sciences (affiliated to CASIPM) organized two large scale surveys to investigate implementation situation of the supporting policies targeting at enterprises having enterprise technology centers recognized by the central or province government. </li></ul>3. Implementation of China's government policy
  8. 8. Table1 Types of the enterprises whose products were included in the &quot;Catalogue for Government Procurement of Indigenous Innovative Products&quot; central-rate enterprise state-owned enterprise (non-central rate) enterprise transferred from institute or academy collective enterprise private enterprise foreign-funded enterprise others Unknown type total number 15 37 4 3 73 8 17 9 166 percentage 9.0% 22.3% 2.4% 1.8% 44.0% 4.8% 10.2% 5.5% 100%
  9. 9. Table 2 Reasons for the enterprises whose products weren’t included in the &quot;Catalogue for Government Procurement of Indigenous Innovative Products&quot; reason category enterprise didn’t know the policy policy was less attractive policy requirements were too high to enjoy policy was lack of operability Percentage of the number of the enterprises which were not included in the &quot;Catalog of government procuring the indigenous innovative products 28.72% 4.03% 42.02% 19.00% Percentage of the number of the enterprises which didn’t enjoy the government's first buy of the indigenous innovative products and ordering policy 31.69% 4.18% 46.66% 19.45%
  10. 10. <ul><li>The Ministry of finance and Ministry of S&T this year issued a new implementing regulation on identification of government procurement which was “ notice of the identification of the indigenous innovation products in 2010 (draft )”, and expanded the scope of the indigenous innovation products to foreign products truly. </li></ul><ul><li>The new implementing regulation replaced the former stipulations of &quot;the indigenous intellectual property rights&quot; and &quot; indigenous brand“ with two requirements of “ enjoys intellectual property right or intellectual property licenses right in China according to law “, and “ has exclusive right or using right of the registered trademark of product in China according to law” . </li></ul>
  11. 11. 4. Correlation analysis between the government procurement policy and the implementation regulations 4. 1 Analysis method: comparison study Supporting policy point1 point2 Point5 regulation1 regulation2 regulation7 Other laws or policies Other regulations consistency inconsistency contradiction deficiency …… ……
  12. 12. <ul><li>Consistency : the supporting policies and implementing regulations </li></ul><ul><li>Inconsistency: the supporting policies and implementing regulations. </li></ul><ul><li>Deficiency: the implementing regulation themselves. </li></ul><ul><li>Contradiction : the implementing regulations and other laws, policies and regulations. </li></ul>
  13. 14. <ul><li>&quot;Establishing system of financial procurement of the indigenous innovation products,&quot; and &quot;Improving assessment method of the government procurement and give priority treatment to the indigenous innovation products&quot; are well supported by the corresponding implementing regulations. </li></ul>
  14. 15. <ul><li>The Inconsistency of the implementing regulations with the supporting policies embodied as following: </li></ul><ul><li>1. “Establishing the system of the government's first-buy of the indigenous innovative products and ordering system” is lack of support of implementing regulations. </li></ul><ul><li>2. &quot;Establishing the system of the domestic goods and audit system of purchasing foreign products” is only supported by one implementing regulation. </li></ul><ul><li>3. &quot;Play roles of the defense procurement favoring the indigenous innovation &quot; is lack of support of implementing regulations. </li></ul>
  15. 16. <ul><li>1. Definitude the certification and evaluation criteria of the indigenous innovative products. It is important to give clear definitions of the indigenous innovative products and indigenous intellectual property rights. </li></ul><ul><li>Formulating implementing regulations of the “PRC Government Procurement Law”. </li></ul><ul><li>It is necessary to define the first-buy, ordering and using subjects of the indigenous innovative products, and government procurement budgeting, government procurement contract, government procurement assessment, government procurement procedure and so on, and make clear the defect tolerance rate of the indigenous innovative products that can't passed the market test. </li></ul>5. Main recommendations
  16. 17. 4. Establishing a quick updating mechanism of Catalogue of Indigenous Innovative Products. Governments should issue the Catalogue of Indigenous Innovative Products and should update it timely. 5. Increasing the proportion of subsidy-based procurement. The major domestically made high-tech equipments and products that possess proprietary intellectual property rights can be given a post subsidy in accordance with its R&D costs and pre-state financial investment and the required years to amortize. 6. Expanding the government procurement policy scope to the individual indigenous innovative products and technologies. Non-service invention products and technologies should be treated as the indigenous innovative ones and should be purchased by the government too.
  17. 18. <ul><li>Thank you for your attention ! </li></ul>

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