Procurement Risk:
Very High
Score:
24/100
Government Policy
Q57
38/100
Does the country have legislation covering defence and security procurement with clauses specific to corruption risks, and are any items exempt from these laws?
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This indicator is not assigned a score in the GDI. The legal framework for military procurement consists of the following set of regulations and…
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The CMC Equipment Procurement Regulations make reference to conducting procurement with honesty (article 6) and to a commitment to punishing abuse of power, collusion,…
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There is no transparency in this regard. However, the fact that there was extensive corruption in the former General Logistics Department, [1,2,3] which was…
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Q58
50/100
Is the defence procurement cycle process, from assessment of needs, through contract implementation and sign-off, all the way to asset disposal, disclosed to the public?
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The Equipment Procurement Regulations (中央军委装备采购条) of 2002 outline the process of procurement in detail, with deadlines and concrete measures that need to be taken…
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On the two procurement platforms, relevant regulations can be found, as well as many announcements on technical aspects (for instance on the registration of…
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On the two procurement platforms, relevant regulations can be found, as well as many announcements on technical aspects (for instance on the registration of…
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Q59
13/100
Are defence procurement oversight mechanisms in place and are these oversight mechanisms active and transparent?
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Οversight mechanisms are internal, under the CMC hierarchy, not independent. After the CMC reorganisation in 2016, these include the CMC Equipment Development Department (responsible…
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No publicly available reports on the effectiveness of oversight mechanisms in procurement appear to be available on the MoD and CMC websites, or via…
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Οversight mechanisms in the procurement process are not transparent at all. Their operation methods and effectiveness are unknown.
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Forward planning exists but is not transparent. The CMC Equipment Procurement Regulations (2002, 装备采购条例) [1] stipulate a three-year procurement cycle with detailed timeframes and…
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In the few instances when the MoD has announced its plans for purchases in White Papers or official statements, there has been no clear…
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Defence purchases are made public in two ways. Regarding major weapon systems, the public is informed through official press releases and military parades. For…
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Αpart from official press releases and announcements on the type of weapons systems purchased, its origin and its operational stage, there is no other…
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Capability Gap and Requirements Definition
Q62
25/100
What procedures and standards are companies required to have – such as compliance programmes and business conduct programmes – in order to be able to bid for work for the Ministry of Defence or armed forces?
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Military procurement in China until the late 2000s was a closed system regulated by the CMC and the State Administration of Science, Technology and…
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The existence of a licensing system which also restricts access to the two online platforms for military procurement shows that these regulations are implemented…
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Q63
25/100
Are procurement requirements derived from a national defence and security strategy, and are procurement decisions well-audited? Are defence purchases based on clearly identified and quantified requirements?
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Ιn broad terms, China’s weapons procurement is aligned with the strategic priorities and goals presented in its Defence White Papers. For instance, purchases of…
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Τhere is no evidence of external scrutiny of actual purchases to ensure that they fall under the national defence strategy by any non-military oversight…
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With the existing degree of transparency in budgets [1] and procurement processes we cannot make a safe assessment on the existence of opportunistic purchases.…
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Tender Solicitation, Assessment and Contract Award
Q64
25/100
Is defence procurement generally conducted as open competition or is there a significant element of single-sourcing (that is, without competition)?
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A distinction must be made between weaponry and non-weaponry procurement. Procurement of major weaponry (usually Russian weapons systems) is conducted through single-sourcing, [1] while…
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Oversight mechanisms are internal, not external and have recently undergone a major restructuring. [1] There is no publicly available information on how scrutiny over…
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Q65
6/100
Are tender boards subject to regulations and codes of conduct and are their decisions subject to independent audit to ensure due process and fairness?
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Article 33 of the Regulations on the Competitive Procurement of Equipment stipulates the following illegal activities of individuals involved in tender board processes: failure…
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There is no transparency in the audit trails in tender boards. The only information available is public announcements by companies and research institutions announcing…
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Τhere are no regulations regarding the transparency of tender boards. The actual procurement decision-making process is very secretive by design. [1,2]
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There is no external verification of tender requirements and specifications. The procurement process is managed by the CMC Equipment Development Department without external (non-military)…
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Q66
67/100
Does the country have legislation in place to discourage and punish collusion between bidders for defence and security contracts?
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According to Αrticle 57 of the 2010 Weapons and Equipment Quality Management Regulations (武器装备质量管理条例), collusion is prohibited both between officials and production units (bidders)…
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Τhe legislation mentioned above stipulates two types of punishment depending on the severity of the crime: a) punishments according to the PRC Regulations on…
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There is very limited public information on cases of collusion between bidders, as well as bidders and officials. Pei Minxin reports that collusive corruption…
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Τhere is no publicly available information on the type of training followed by procurement officials.
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Contract Delivery and In-Service Support
Q67
31/100
Are there mechanisms and procedures that ensure that contractors meet their obligations on reporting and delivery?
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Articles 16-51 of the 2010 Weapons and Equipment Quality Management Regulations outline a process with various stages and controls, deadlines, reporting requirements, clear inspection…
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Apart from the legal framework, there is no publicly available information on reporting and delivery. The military procurement platforms post a project completion notice…
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The CCP has opened more military contracts to private contractors since 2016 [1] and relevant regulations have been enacted [2] but there is no…
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Although relevant regulations are in place, there is no transparency in terms of contract implementation. As such, nothing is known about how breaches of…
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Q68
NEI/100
Are there mechanisms in place to allow companies to complain about perceived malpractice in procurement, and are companies protected from discrimination when they use these mechanisms?
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There are detailed relevant regulations [1] and, at least on paper, an institutionalised and straightforward complaints mechanism that is easily accessible online. [2,3] The…
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There is no publicly available information on the use of complaint mechanisms in defence procurement, although the mechanisms are in place. As such, this…
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There are no known cases of retaliation following complaints in defence procurement processes that have emerged in the Chinese or English press. It is…
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There are two types of sanctions: administrative and criminal. Administrative sanctions include suspending or revoking licences for equipment procurement and production (Articles 52-6, Weapons…
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Undue influence is a systemic problem in military procurement in China and, in the past, there have been many cases of corruption in procurement.…
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China’s Defence Industrial Complex, comprised of State Owned Enterprises, is very secretive and corrupt. [1] No case of an SOE being banned from military…
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Offset Contracts
Q70
0/100
When negotiating offset contracts, does the government specifically address corruption risk by imposing anti-corruption due diligence on contractors and third parties?
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There are no specific policies or procedures (state or military) on monitoring offset contracts in China, [1] despite them having been used in government…
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The government does not publicise details of offset contracts.
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These reports, if produced, are not made public.
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There are no instances of breaches of offset contracts that have been reported in the media.
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China does not have an official policy on offset contracts [1] but has used them extensively to secure technology transfers and other benefits. [2]…
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Agents / Brokers
Q73
NEI/100
How strongly does the government control the company’s use of agents and intermediaries in the procurement cycle?
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Αccording to an ADB//OCD report, China has a comprehensive legal framework for the control of intermediaries in government procurement. [1] However, this legal framework…
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Τhere is no information regarding the control of intermediaries in military procurement. We have very limited information regarding their use, such as the case…
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Financing Package
Q74
0/100
Are the principal aspects of the financing package surrounding major arms deals, (such as payment timelines, interest rates, commercial loans or export credit agreements) made publicly available prior to the signing of contracts?
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There is no public information on financing packages surrounding major arms deals. The CMC Procurement Regulations (2002) do not stipulate public access to information…
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Seller Influence
Q75
NS/100
How common is it for defence acquisition decisions to be based on political influence by selling nations?
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This indicator is not assigned a score in the GDI. China’s arms imports are mainly from Russia (67%), followed by Ukraine and France, which…
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This indicator is not assigned a score in the GDI. The CCP and the PLA justify the procurement and development of major weapons systems…
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This indicator is not assigned a score in the GDI. There is no evidence that China’s defence acquisition decisions are influenced by domestic political…
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