Key Updates Compared with the Draft
1. Clarifying Timeline & Dynamic Adjustment Mechanism
- The Notice will come into effect on January 1, 2026.
- Within five years of implementation, the Ministry of Finance, together with relevant industry authorities, will set out specific requirements for the proportion of domestically produced component costs.
- A three-to-five-year transition period will be set to gradually establish a standard system and dynamic adjustment mechanism for domestic products in government procurement.
2. Clarifying Measures Against Discrimination Toward Foreign Brands
- It’s highlighted that no (local or other specific) government procurement policies or measures that violate the provisions of this notice should be introduced
- According to the notice, it is prohibited to designate specific brands or restrict brands based on registration location or ownership in government procurement activities.
AHK Perspective
This topic is highly relevant for German companies: The “Buy China” trend and unequal access to public procurement are major concern of German companies in China. Our most recent Business Confidence Survey shows that policies such as ‘Made in China 2025’ or ‘Buy China’ are now the top regulatory challenge for German companies in China.
While some of our submitted comments were taken into account, the main direction remains unchanged. There are now clearer rules and timelines and explicit commitments against discriminatory procurement practices, but the strategic environment will continue to favor well-localized operations.
Those with a strong local footprint might find it easier to meet domestic product requirements. Hence, some companies have welcomed the Notice, as it provides greater clarity and is intended, at least in principle, to curb local protectionism. Nevertheless, for many the reality is that ‘Buy China’ priorities, market access and market share questions remain significant challenges. German companies should closely monitor how the “dynamic adjustment mechanism” will work in practice during the transition period.
In the meantime, companies can have a look at our Q&A guide about the domestic product standards in government procurement for a timely preparation: