China purchased at least 400 billion yuan (US$55.6 billion) of goods and services in 2007, a new high compared to the 368.1 billion yuan recorded a year earlier, preliminary figures from the Ministry of Finance (MOF) revealed.

Assistant Financial Minister Zhang Tong described the expansion as "outstanding" given the procurement stood at only 100 billion yuan in 2002, the first year the mechanism was introduced.

The past five years have also witnessed an increasingly diversified government consumption that expanded from solely commodities in the beginning to services and engineering, he said.

With 13,000 people engaged in purchasing nationwide, China has twice revised its procurement list to include 18 categories encompassing nearly 4,770 items.

Energy-saving products accounted for a large percentage of the newly-added items. To lead by example, the government has pledged to reduce energy consumption for every 10,000 yuan of gross domestic product by 20 percent and pollutant emissions by 10 percent for the 2006-2010 period.

This year, student textbooks for primary and junior high schools, medicine, farm machinery and other items to distribute to the needy free of charge or at inexpensive prices will be added to the list, Financial Minister Xie Xuren told a recent work meeting for 2008.

Under a MOF directive promulgated last month, government procurement will favor independent innovation products starting this year, a practice, experts said, the United States adopted in the late 1950s to foster domestic high-tech industries, including aeronautic and astronautic technology, computing, semiconductors and integrated circuits.

Qinghua University law professor Yu An said the move would provide good incentives for domestic firms to speed up technical innovation.

MOF statistics revealed the procurement had spared an aggregate expenditure of at least 180 billion yuan between 2002 and 2007.

The benefits, however, didn't drown out grumbles from the Heilongjiang provincial chapter of the Revolutionary Committee of the Chinese Kuomintang, one of the country's eight political parties, beside the ruling Communist Party of China (CPC).

At a meeting last month, the chapter held transparency in government procurement should be enhanced as some products were found to be overpriced, of unsatisfactory quality or without effective after-sales service.

Tendering companies must be subject to real-time supervision to avoid bribery and kickbacks. Perpetrating firms must be blacklisted and banned from the procurement, while governmental departments must submit their accounting ledgers for regular auditing scrutiny, they said.

(China Daily February 10, 2008)