China quietly sets new ‘buy Chinese’ targets for state companies – US sources

GBNews24 Desk//

China’s government quietly issued new procurement guidelines in May that require up to 100% local content on hundreds of items including X-ray machines and magnetic resonance imaging equipment, erecting fresh barriers for foreign suppliers, three US-based sources told Reuters.

Document 551 was issued on May 14 by the Chinese Ministry of Finance and the Ministry of Industry and Information Technology (MIIT), with the title, “Auditing guidelines for government procurement of imported products,” said one former US government official, who obtained a copy of the previously unreported 70-page catalog and read portions to Reuters, but requested anonymity.

The former official said that when China joined the World Trade Organization, it agreed not to issue such internal documents. The document also violated the spirit of the January 2020 Phase One trade deal with the United States, the former official said. “They need to reduce barriers, not create new ones.”

Sent to Chinese hospitals, companies and other state-owned buyers, the document sets local content requirements of 25% to 100% for 315 items. They include medical equipment, ground-based radar equipment, testing machinery, optical instruments; items used for animal husbandry; seismic instruments, and marine, geological and geophysical equipment, the former official said.

The document has not been publicly released by Beijing.

China’s Ministry of Finance and Ministry of Industry and Information Technology did not respond to queries about it.

Some US lawmakers and industry officials are increasingly concerned about Beijing’s transparency on trade issues.

The new guidelines affect a wide range of goods, including medical devices, which Beijing agreed to buy more of under the terms of the Phase 1 trade deal. For example, magnetic resonance imaging equipment – a key export for US companies in the past – would face a 100% local content requirements under the new guidelines, the former official said.

US trade experts said China’s local content rules differed from planned increases in US “Buy American” thresholds because they were not publicly released, and affect far greater volumes of medical equipment and other goods since China’s state-owned enterprises include hospitals and other entities.