‘Protectionist’ rule defended by China

16 December 2009

16 December 2009 | Jake Kanter

China has argued strongly in support of a new procurement rule following criticism from global suppliers.

Under the “indigenous innovation product accreditation” system, Chinese public sector buyers must give preference to specially certified goods.

To gain accreditation, the intellectual property of a product must be developed and owned in China and the trademark must also be registered in the country.

The heads of 34 trade associations from across the world who represent a diverse range of global companies and industries, wrote to the Chinese government last week complaining the proposal was “onerous and discriminatory”.

Representatives of technology suppliers - including Intel and Cisco Systems - expressed particular concern because the scheme impacts purchases of hardware and software.

But a spokeswoman for the Chinese Foreign Affairs Ministry said yesterday the rule does not favour domestic vendors and is in line with World Trade Organization regulations.

“The indigenous innovation product accreditation work treats both domestic and foreign invested enterprises equally, without discrimination,” she said.

Bradley Feuling, chief executive of supply chain consultancy Kong and Allan, said the proposal could be a “big barrier to innovation” in China.

“Advanced technology is produced by Chinese suppliers, but it still has some leaps to go. This policy could restrict the information and technology flow from other countries.”

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