The Government Procurement Law, passed in July but not effective until 2003, requires government departments to buy domestically produced goods and services unless they cannot be obtained under reasonable commercial conditions, Xinhua reported. Goods made by foreign-invested firms qualify as domestically produced.
Government procurement has expanded rapidly in recent years, the news agency said. Transaction volumes reached Yn65.3bn in 2001, more than double the figure for the previous year. However, this figure only accounted for 2 per cent of total government – including local government – expenditure.