International procurement + Herbal remedy against Covid • China.Table

Procurement: EU wants more fairness
TCM pills against Covid
Beijing tightens Covid measures
German government wants to promote China expertise
Renewables grow rapidly
Hong Kong plummets in press freedom ranking
Covestro fears Covid downturn
Sinolytics.Radar: Chinese consumption is insufficient
Opinion: legal advice about lockdown

Dear reader,

From ballpoint pens to highway bridges – government agencies spend billions each year through public procurement. So it is no wonder that Western companies are repeatedly outraged by China’s procurement practices. Agencies in the People’s Republic favor domestic companies. And abroad, Chinese companies undermine fair competition with dumping prices. But the EU now wants to remedy the situation. A new instrument aims to make the European procurement market fairer and force China to open its market. However, the question whether this will succeed remains open, analyzes Amelie Richter.

Hundreds of millions of people in China are affected by Covid lockdowns. In Shanghai, food and medicine even became scarce at one point. Instead, citizens received mass quantities of traditional herbal mixtures. These supplies are probably intended to achieve two things: They are supposed to demonstrate that the government is doing something for its citizens and can provide them with medicine. And they promote the international reputation of traditional Chinese medicine (TCM) as an alternative to Western science.

But these herbal capsules are also controversial in the country, reports Fabian Kretschmer. Their effect has not been proven by studies, instead, they may even have side effects. For manufacturers, however, it is a billion-dollar business.

Your
Nico Beckert

Feature

EU wants to open China’s procurement market

Chinese companies could soon face considerable headwinds in the EU when it comes to public construction, supply and service contracts. Brussels wants to put a stop to cheap bids from the People’s Republic by introducing new EU rules. These regulations are also intended to prompt China to open up its own procurement market to Europeans. But whether that will work is questionable.

By
Amelie Richter

Chinese companies snatch up public construction tenders for giant bridges in Croatia, while EU companies are not even allowed to bid on similar projects in the People’s Republic. This is exactly what the International Procurement Instrument (IPI) is supposed to change. With this new EU regulation, the Commission wants to break up the Chinese procurement market. At the same time, it wants to put cheap bids from China at a disadvantage in public tenders. The European Parliament is expected to vote on the IPI in June. All that is then needed is the green light from the EU Council before this new instrument can be formally adopted and implemented.

The plan is: If a non-EU country such as the People’s Republic refuses to open its public procurement market to EU bidders to the same extent as the EU, sanctions may be imposed. Bids from China could either be completely excluded from a tender or receive a surcharge. An exclusion would require a qualified majority among the EU governments. That is two-thirds of all member states. If, on the other hand, only a price surcharge is sought, authority lies with Brussels However, this cannot happen overnight and not for every tender:

First, the EU has to open investigations into cases where a discrimination to EU companies is suspected in procurement markets of third countries;
Formal consultations are then held with the country concerned to discuss the opening of its procurement market;
If there is no change in the third country, access for the foreign companies in the EU may ultimately be restricted;
In addition, thresholds will apply to tendering procedures: These new rules only apply to construction work and concessions with a value of €15 million or more, and to goods and services with a value of more than €5 million.
There will be exceptions for developing countries. Exemptions may also be made, for example, if large quantities of a product have to be procured quickly.

In China, there is so far “no intention to open the market,” said Daniel Caspary (CDU), MEP responsible for the IPI, at a press conference after the agreement of the EU Parliament and the EU Council. He said the EU’s goal with the new instrument is not to close the European market to third countries, but rather to encourage other countries to open up. But, “we want to be defensible in case of doubt and exert pressure,” Caspary said. He emphasized that China also intends to draw know-how into its own country with cheap foreign contracts.

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