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China Begins Compulsory Procurement of Energy-saving Items

The Chinese government is to enforce the procurement of energy-efficient products by departments and local authorities with a new list of compulsory purchase items.

The compulsory list is a move away from the "preferential" list under the Government Purchase Law, which allowed government bodies to shop around for other products if they could justify them on cost and energy-efficiency grounds.

Both lists will operate in tandem stipulating different types and brands of products, the Ministry of Finance and National Development and Reform Commission (NDRC) announced on Wednesday.

The compulsory list published at an industry seminar listed nine types of products, including air conditioners, fluorescent lamps, televisions, electric water heaters, computers, printers, computer monitors, urinals and toilet pans and water nozzles.

Meanwhile, the ministry and the NDRC announced an updated the preferential list with another 24 types of products, including rice cookers, washing machines, DVD players, induction cookers, water coolers, projectors, gas heaters, power switches, cooking utensils and shower units.

"Since the promulgation and implementation of the Government Purchase Law, the reform of government procurement has achieved tangible results," said Zhang Tong, Assistant Finance Minister on Wednesday.

The Government Purchase Law took effect on Jan. 1, 2003. In the five years since, official statistics show about 5.1 billion yuan (US$692 million) was saved in government procurement costs.

The compulsory procurement meant those agencies have to buy the listed products because they have been approved to be more reliable and energy-saving, said Yue Zongwen, director of the Market Department of the China Standard Certification Center, an agency in charge of the list drafting and certification work.

"To be on the procurement list is not equal to being in the safe box, as our center would carry out supervision of those enterprises annually. Those who cannot keep up with the evolving and more stringent national energy saving standards will be removed from the list," said Yue.

The government released the first procurement list in December 2004, covering eight products of 1,500 varieties and revised the list in July 2006 to add 10 types of products, making it encompass4,770 varieties.

The State Council or cabinet issued a circular on the establishment of a compulsory government procurement system for energy-saving products in July in a bid to promote the nationwide energy saving program and cut government administrative costs.

"Gradually the procurement list would cover all the procuring activities of the government," said Yue

Last year, the government pledged to reduce energy consumption for every 10,000 yuan of GDP by 20 percent and pollutant emissions by 10 percent for the 2006-2010 period.

In a similar development, among the 140 articles of the draft energy law, at least 20 concern energy conservation and the development of clean and renewable energy, in an effort to boost energy conservation through legislative approaches.

The draft requires local governments to push forward energy-efficient production processes, consumption approaches and lifestyles. They are also ordered to raise efficiency of energy use and encourage the replacement of traditional energy with new types of energy.

Official figures reveal the government had also earmarked 23.5 billion yuan for energy conservation and emission-reduction purposes this year.

"Strengthening the compulsory government procurement system is one of the measures taken by the government to build an energy-saving and environment-friendly society," said Zhang.

The just-concluded Central Economic Work Conference that gathered China's top economic planners together, highlighted the need to save energy and reduce emissions, saying it was key to "scientific development", a phrase that refers to efficient and sustained growth.

Zhang called on leaders of local governmental branches to enhance the awareness of energy conservation and carry out the compulsory government procurement practice in an earnest manner.

(Xinhua News Agency December 13, 2007)

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