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Government Procurement in 2005 Up by 37%

China's governments at all levels spent 292.76 billion yuan (US$36.6 billion) on procurement in 2005, an increase of 37.1 percent year on year, according to figures released Wednesday by the Ministry of Finance. 

The ministry said the value of the country's government procurement in 2005 accounted for 1.6 percent of the gross domestic product (GDP), almost the same as in 2004. 

The proportion of government procurement to GDP in developed countries averages 10 to 15 percent. 

The value of government procurement has been growing at an annual average rate of 77.9 percent since 1999, the year the Government Procurement Law came into effect. 

Government spending on engineering projects and service industries increased to 132 billion yuan (US$16.5 billion) and 19 billion yuan (US$2.4 billion) respectively, with the former making up 45.2 percent and the later6.7 percent of the total volume. 

China aims to use government procurement to spur economic growth in less developed areas and small and medium-size enterprises. It also plans to spend more on procuring environmental protection.

The ministry said China's governments are likely to spend up to 300 billion yuan (US$37.5 billion) on government procurement in 2006, up 5 billion yuan (US$621 million) from last year. 

(Xinhua News Agency August 11, 2006)

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