Session 3 Zhu JianYuan PRC Final 221111

8/3/2019 Session 3 Zhu JianYuan PRC Final 221111

http://slidepdf.com/reader/full/session-3-zhu-jianyuan-prc-final-221111 1/23

Dr. Zhu Jianyuan

Regulatory and InstitutionalFramework for e-Procurement

in the People’s Republic of China



Dr. Zhu Jianyuan

Co-author of the first Concession Management Approach in China

Lead co-author of The Law on Bidding

Co-author lead expert of Government Procurement Law

Board Member of the China Tendering and Bidding Association (CTBA)



• Introduction

• Our Solutions – Establishment ofa Regulatory Framework for e-Procurement

III

• Current Situation and IssuesI

Ⅰ

Table of Contents



Ⅰ. Introduction

Feature - Huge investment in fixed assets

0

5

10

15

20

25

30

2008 2009 2010

17

22

27

RMB Trillion

China invested RMB 27 Trillion in fixed assets, 2010.Tendering and Bidding are the main channels of selecting suppliers



9%

17%

6%1%6%

36%

5%

20%Transportation

Chemical products

Energy

Metallurgy & Minerals

IT

Urban infrastructure

& servicesWater conservancy

Etc.

。

Ⅰ. Introduction

Sector distribution for fixed assets investment in 2010



7

2.1%

3.6%

4.5%

5.3%

5.9%

6.4%6.7%

7.1%

7.5%

8.0%

8.5%

9.2%

2009E 2010E 2011E 2012E 2013E 2014E 2015E 2016E 2017E 2018E 2019E 2020E

Percentage of netizen’s online shopping vs. total online retail sales

80

300

640

Source: National Bureau of Statistics,

Ministry of Commerce, public media

By the Development Strategy Department of 360buy.com

100

300

400

600

200

500

0

1.0%

2.0%

6.0%

10.0%

The online retail market size in China is expected to growfrom $ 80 billion in 2010 to $ 300 billion in 2015

Size of online shopping by netizens, 2009-2020

(Unit: $ billion)

1.0%

3.0%

4.0%

5.0%

7.0%

8.0%

9.0%



24.5%

22.1%

24.8%

28.1%

35.1%

15%

20%

40%

200

500

2006 2007 2008 2009 2010

The best time for e-commerce

Size & rate of penetration rate of Internet in China

Total numberof netizens

Number of online buyers

Penetration rate of online shopping

Source: China National Network Information Center By the Development Strategy Department of 360buy.com

400

300

100

0

N u m b e r o f N e t i z e n s

( i n m i l l i o n s )

35%

30%

25%

10%

5%

0%



EnvironmentallyFriendly

FosterEfficiency

Relevance ofe-Procurement

Promoteinstitutionalinnovation

Ⅰ. Introduction

Relevance of e-Procurement



Ⅱ. Current Situation

All

transactions

online

Online

bidding

Online

purchase

TenderingDocuments

Different levels of e-Procurement




Multiple dimension of e-Procurement

Civil

Works

ICB

GP

Procure

ment

Agent




Different models of e-Procurement

Different

Models

Government

Led

SOE

IT Service

Provider

Procurem

ent Agent



Lack oftechnical

standards

Absence oflegal

framework

Security oftransactions

Noinformationmechanism

Issues

Structure of KONEPS

Issues encountered in development

Ⅱ. Issues



Structure of KONEPSⅢ. Our Solutions

Legal framework

Extensive Research

Survey was conducted following issuance by NDRC of the draft legislation on e-Procurement in February, 2009.

Promotion Forum

The 1st China Tendering & Procurement Electronic Development Forum was held inBeijing in April, 2009.

Setup of Working Group

The inception meeting for preparation of "Technical Specification for Electronic

Tendering and Bidding System" was organized by NDRC in December, 2009. NDRCentrusted the China Tendering and Bidding Association (CTBA) with the selection ofthe experts for the Working Group.

Drafting of Regulation

the “Electronic Tendering & Bidding Regulations (Preliminary Draft)” and its annex“Technical Specifications for an Electronic Tendering and Bidding Platform(Preliminary Draft)” were proposed by the NDRC together with relevant departments

of the state council.



Provide legal basisfor e-Procurement

Draftregulation on

e-Procurement

Ⅲ. Our Solutions

Legal basis for regulation



Draftregulation on

e-Procurement

Ⅲ. Our Solutions

Multi-leveladministrativeframework

Administrative framework



Integration ofGovernment PublicService andTransaction Platforms

Ⅲ. Our Solutions

Model

Draftregulation on

e-Procurement



The Public Service Platform

The Transaction Platform

Principles: government leadership, unified standard, centralized and unified

public information service platform.

the hub of e-information exchange, providing service for the project transaction

system, featuring in public & common service

Focused on transactional services (procurement of goods,

works and services)

Characteristics of KONEPSⅢ. Our Solutions

A three-layer national information network platform system will cover all

industries and regions.



Ⅲ. Our Solutions

Public service platform at

national level

public service platform at

provincial level

Administrative

supervision

departments of

the State Council

Administrative

supervision

departments at

provincial level

Public service

platform at

municipal level

public service

platform at

municipal level

项目

Transaction

platform system

Transaction platform

system

Administrative

supervisiondepartments at

municipal level

Structure of the Model



Setup of onlineoversight & complaintmechanisms

Ⅲ. Our Solutions

Draft

regulation on

e-Procurement

Oversight & Complaint Mechanisms



Technical Specifications of Electronic

Tendering and Bidding Transaction System

▶ the technical specifications of information system,guaranteeing the validity, security, reliability, and

coordination of electronic tendering and bidding

▶ unifying the standards for applicability, terms &

definitions, system structure & function, data interface,

technical support & guarantee, system coding, interface

format, system evaluation, etc.

Ⅲ. Our Solutions

Technical Specification of e-Procurement System



Technical Specifications of Electronic

Tendering and Bidding Public Service Platform ▶ stating the frame structure, basic service function

of e-Procurement, explaining its relation with the

project transaction system

Ⅲ. Our Solutions

Technical Specification of e-Procurement System

I t t d ill l d t i l h



5

Internet and e-commerce will leads to social changes

Driven by

technological

revolution

Driven by Commercial

innovationSocial change

The Evolutionof IT

Development stage

The next stage of technological revolution

Emergence of newtechnologies

Development of new technologies

Surge in the use of new technologies

Emergence of

new business models

Consolidation of new business models

Rapid development of new business models

Maturity of

new businessmodels

Socialchange

Invention of tabulator &perforating machine

Invention &Use of

computer

Inventionof the Internet

Beginning of e-commerce

Rise of e-commerce

The publicstart autonomous

learningof new business& technology

The maturity of regulations on

the Internet

Change s in social& cultural behavior

F i n an c i al b

u b b l e s

I n s t i t u t i on al a

d j u s t m en t

. c om

b u b b l e s

T h e a d j u s t m en t of

ol d & n ew

i n s t i t u t i on s

2000 2010 2015

