Domestic-product-discrimination by Government Procurement Bring Serious Consequence
“Foreign brand comes first, while domestic brand, second” is a general phenomenon, nowadays, in the government procurement bidding under the influence of all kinds of “hidden rules”, such as commercial bribery.
Recently, a large state-owned communications company bid for a large project with nearly one billion RMB, while only one domestic enterprise became the lucky bird. So, what’s the true fact behind the big project bidding? Hence, two reporters from Newsweek LiaoWang interviewed some equipment manufacturing enterprises. Though our country declared again and again that domestic brands prior to foreign brands in government procurement, the former are always being neglected and discriminated seriously. However, it is very significant for the government procurement to bid for in-land brands rather than foreign ones.
According to the reporters, some domestic equipment manufacturing enterprises have to input 20% of their incomes to the government procurement PR in order to get their favor, which severely frustrated the domestic enterprise’s independent innovation and enthusiasm, and fasten and worsen enterprise’s corruption.
“Hidden rules” blocked the good domestic brands.
Gongdong Honny Power-Tech CO., LTD, a professional diesel generator producer, has been honored asGuangdong Famous Trademark and Guangdong Top Brand. However, Li Yuwang, CEO of the company, told us depressively that domestic diesel-products in high quality are not as popular as foreign generators, we even lose the chance at home”. He said continuously, “Take the Dongguan News Centre for example, they bid for generator with 2000kw in foreign markets, however in mainland it is also possible to assemble the same generator on less investment and with easier way to use. Why they choose the foreign brand? This is absolutely a question. Such technical threshold blocked the domestic market. What’s more, it is the same case in bidding for Dongguan People’s Hospital and Guangzhou Radio and Television Centre. It’s puzzling.”
In this way, how could our country provide domestic equipment manufacturing enterprises with good opportunities? Many domestic equipment manufacturing enterprises expressed the same concerns and doubts. If one enterprise fail to choose domestic brands, then more will follow up.
PR fees account for 2%
According to many equipment manufacturing enterprises’ feedback, bidders show a biased view in government procurement. For example, they distrust the domestic products, fearing of taking needless responsibilities. Even though the government procurement prvide us with some chances sometimes, bidders are not confident of domestic products, so as to keep the prices down resulting in a “Price War” among enterprises, which made the products with low quality and price winners.
Station power supply equipment which produced by Shenzhen Tai Ang Electronic Technology Co., Ltd plays a major role internationally. CEO Huang Jingyu told us that “we cannot experience the great opportunities, though our country encourage enterprises to make innovation. What’s more, bidders are always choose the out-of-date technology products. It’s baffling!” “Our products are good ones with superior technology and quality, but we fail the bid just because of the high price. Then, why is it acceptable for government procurement department to purchase foreign brands in high price, but domestic products in low price?”
Such unfair facts lead to serious consequence. No respect in enterprise’s independent innovation, no enterprise will make innovation and no progress will the enterprises make. Besides, in order to get government’s favor, many enterprises take grant for research and development, but busy in dealing with “social relationship”.
Jin Lin, president of Shenzhen Tai Ang Electronic Technology Co., Ltd, told us in grief, “On one hand government procurement favor foreign brand, on the other hand, they keep down the price of domestic brands. In order to make profit, some equipment manufacturing enterprises input too much energy and capital in improving the “social contacts”, while research and development only account for 5%, which lead us a false concept that the essencial way for a company to grow well is depend on good social-contact rather than research and development, which also fasten and worsen corruption.”
Stated-owned monopolies, government departments, large-scale projects etc..are the main customers, so it is essential and encouraging for government procurement to cultivate, support and strengthen domestic equipment manufacturing enterprises.
It is a great truth that our country state and advocate the priority in pursuing domestic brand. However, it is not the real fact due to the lacking of impartial and science government procurement system. Saying is one thing, doing is another. Hence, domestic equipment manufactures strongly appealed to establish a mature, comprehensive, scientific and fair procurement system.
He Simo, CEO of East CO., Ltd, suggested that government procurement should strictly stipulate the propotion of domestic production. For example, were you want to buy an import, you have to get the approval of several government departments at the same time. Then the departments investigate the product. At last, they make final decision.
Jin Lin and some other peers have their own thoughts, too. They consider government procurement as an essensial point in guiding the enterprises to grow into healthy and prosperous, so we should pay great importance to it and standardize it. He added, “we should establish a specific expert group. Then the experts, rather than the leaders, preside over the fair and scientific bid.”
