3 November, 2012

On October 10, 2012, the Ministry of Commerce (“MOFCOM”) issued the draft Implementation Rules on Mechanical and Electrical Products International Tendering and Bidding for comments. The public was allowed to submit comments on the draft until October 20, 2012. The draft rules, if implemented, will supersede the Implementation Rules on Mechanical and Electrical Products International Tendering and Bidding issued in 2004 (the “2004 rules”). Under the draft rules, in situations where international bidding would otherwise apply, if it is specified that the place of origin of the product to be procured is within the customs territory of China, the procurement process may be exempted from international bidding. However, several exemptions which were included in the 2004 rules have been removed including: (1) the import of mechanical and electrical products within the total investment of a foreign invested enterprise; (2) mechanical and electrical products required for specific products or industries determined by the State Council and products required for major unexpected contingencies; and (3) mechanical and electrical products enjoying a discount of more than 50% of the estimated contract value when the manufacturer offers discounts. The draft also provides that mechanical and electrical products with a place of origin outside the customs territory of China offered for sale after exhibition in China may be exempted from international bidding.

The full Chinese text of the draft rules is available here.