China: The legislation of public procurement policy for innovation in China

Abstract

The Chinese Public procurement for innovation (PPFI) policies have taken place quite late comparing to the developed countries. And it has to face the reality of huge economic gap between the East, the Middle and West area in such a vast territory, the truth that Chinese enterprises are still struggling in the gradual process from imitation stage in both technologies and business pattern to innovation driven stage. Yet from the case of Shanghai’s PPFI policies we can see that, the Chinese government is adopting the expertise and knowledge of innovation stimulation by transferring the supply policies into demand policies for innovation, which may present the political innovation from inside itself. Yet there are still a lot of hindrances and problems if the government want to further exploit the function of PPFI policies such as the flexibility of public procurement organization setting, the changes of fund save-first priority needed and the level of innovation stimulation that the government should interfere with. Besides, the government should aware that innovation can only be realized through combination of the need for product or service innovation with transparent process to ensure fair competition in public procurement.