01 febrero 2010

Chinese buyers face ban on family contracts


Purchasers for the Chinese government are to be banned from awarding deals to family members under the latest proposals to reform public procurement rules.

According to state-run newspaper China Daily, the government is drafting regulations to prevent purchasers becoming involved in deals with suppliers that are owned or represented by a relation up to three generations removed.

An English translation of the draft rules said if a supplier suspects that a competitor is related to a buyer during a tender, the vendor can call for the purchaser to be removed from the deal.

The proposed change will clarify an existing regulation from 2003 and aims to tackle corruption in purchasing processes.

Liu Xiaochuan, a professor and procurement policy expert from the Shanghai University of Finance and Economics, told the paper: “Any corruption in the purchasing process can be avoided if the overall purchasing procedure is ensured to be open and public with detailed lists of required products, budgets and specifications.”

Relationships are key to doing business in China, and the concepts of loyalty, trust and reliability are highly sought after by Chinese buyers. Business relations are often said to mimic those of the family dynamic, which still governs much of Chinese life and culture.

By Jake Kanter

Edited by:
Jorge Garcia