Government Orders 'Crucial' for Survival

Source: China Daily

Wang Ruixiang, boss of an audio systems firm in Guangzhou's Panyu district, cannot stay calm when talking about "unfair treatment" in a public tender for government procurement for the 2010 Asian Games.

Although his audio company won the bid for this year's Olympic Games in Beijing, he was not even entitled to submit a bid for the Asian Games in Guangzhou for the simple reason that his business is not big enough.

"I used to encounter similar embarrassment on several occasions when I tried to bid for government procurements," he said. "It is really unfair for small companies."

"If we are not given a fair opportunity to compete in the domestic market, how can we grow strong enough to compete in the global market?" he asked.

Others share Wang's view.

"Even with all the certifications to show our products are up to all the technological parameters, it is still very difficult for us to win a bid for government procurements," said Shi Jun, owner of a lighting firm in Guangzhou. "I have to say small companies are more likely to be discriminated against."

Shi said he hopes the government will implement the laws to be fair to small and medium-sized enterprises (SMEs).

"Governmental procurements, for their big orders, are crucial for the survival and development of SMEs."

Li Qingqing, an associate professor of economics at South China Normal University, said China has laws that urge governmental procurement to foster SME brands.

"The problem is that it is not easy to supervise or punish government departments when they fail to comply with it," she said.

According to the expert, both the governmental procurement law and the SME promotion law give priority to SME products.

Several provinces including Guangdong, Zhejiang, Shaanxi and Yunnan have hammered out such regulations.

"What is urgently needed is to issue concrete measures to encourage SME products in governmental procurements," she said.

She said national SME procurement management methods expected to be issued soon are expected to provide guidelines for governments at different levels so laws will be enforced.

"SMEs are in an unfavorable position to get financial support for their research and development and most of them are generally weaker than big enterprises, not to mention multinational companies in finance, innovation capability, corporate image, brand awareness and after-sales services," noted an official with the governmental procurement department of Guangzhou municipal financial administration, who asked not to be identified. "Without concrete guidelines, the policies to prioritize SMEs in governmental procurements are almost equal to empty talk."

"Some officials' preference for foreign brands makes it even worse."

The official also suggested that SMEs should know more about the governmental procurement laws to avoid being elbowed out in improper bidding processes.

"Not just a few SMEs have failed in Guangzhou for that very reason," he said.

(By Zhan Siyi)

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Editor: Jessie Hwang