SwedCham China Insights for week of 2 December - 6 December

SwedCham China Insights for 2 December - 6 December

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Top news of the week:

China Responds to U.S. Semiconductor Sanctions with Mineral Export Restrictions

December 2, November 2024

The U.S. added 140 companies, including 136 Chinese firms, to its Entity List, tightening controls on semiconductor tools and materials critical for AI chip production. Chinese semiconductor firms downplayed the impact of the sanctions. In response, China announced bans on exporting antimony, gallium, germanium, and ultra-hard materials to the U.S. while imposing stricter graphite export reviews.

China Lifts Trade Restrictions on Australian Meat Exports

December 3, November 2024

China has lifted bans on two Australian meat processing facilities, fully restoring red meat exports, according to the Australian government. This marks the removal of all restrictions on 10 Australian abattoirs blocked between 2020 and 2022, following earlier trade disputes over coal, barley, and wine amid tensions over Australia's call for a COVID-19 origins investigation.

Spring Festival Added to UNESCO’s Cultural Heritage List

December 4, November 2024

China’s Spring Festival, a 15-day celebration marking the Lunar New Year, has been inscribed on UNESCO’s Intangible Cultural Heritage of Humanity list. Known for its traditions of family, unity, and vibrant customs, the festival joins numerous Chinese traditions recognized globally. The decision was made during a UNESCO meeting in Paraguay.

China Proposes Domestic Product Standards for Government Procurement

December 5, November 2024

China’s Finance Ministry plans a 20% price preference for domestic products in government procurement, focusing on industrial goods with key components and processes completed in China. The policy ensures equal treatment for qualifying domestic and foreign enterprises.

China Issues Guidelines for Smart Infrastructure and Resilient Cities

December 6, November 2024

China has unveiled guidelines to integrate advanced information technology into urban infrastructure, aiming to enhance smart city systems and intelligent connected vehicles. By 2027, significant progress is expected in building new urban infrastructure, with replicable practices established. By 2030, the initiative aims to create high-level resilient cities with smarter, safer, and more efficient operations, supported by developments in 5G, autonomous driving, and intelligent sensing systems.

Insight of the week:

On December 5, China’s Ministry of Finance (MOF) issued a draft notice inviting public feedback on new standards and policies for domestic products in government procurement. The proposal seeks to define what qualifies as a “domestic product,” specify its scope of application, and outline supportive measures such as a 20% price evaluation advantage for domestic products over imported ones.

The initiative aims to create a unified, open, competitive, and well-regulated government procurement market. It combines international best practices with China’s specific needs. The proposed standards for domestic products include:

• Production in China: Products must undergo significant transformation—from raw materials to the final product—within China’s customs territory. Simple activities like labelling or basic packaging do not qualify.
• Proportion of Domestic Components: A certain percentage of the product’s components must be produced in China, with this requirement varying by product type and subject to periodic adjustments.
• Key Components and Processes: For specific products, critical components must be made in China, and key production processes must also occur domestically.

At the initial phase, these standards will apply to industrial goods, such as machinery and equipment, but exclude agricultural, forestry, fishery, and mineral products.

The MOF stresses that these policies will treat domestic and foreign enterprises equally. Any enterprise, whether Chinese or foreign funded, can benefit from the procurement support policies if their products meet the established standards. As MOF claims, this approach ensures fair competition while prioritizing domestic innovation and production.

To provide feedback on the current draft, please visit https://gks.mof.gov.cn/gongzuodongtai/202412/t20241205_3949021.htm (in Chinese only) and submit your comments and suggestions by January 4, 2025.