Question: In order to enjoy preferential policies for domestically produced equipment, how can our company’s products be recognised as "Made in China"?

Answer: At present, there is no clear and unified recognition standard. Some previously issued documents provided definitions for domestically produced equipment, but all have since been repealed. For example:

The Administrative Trial Measures for VAT Refunds on Domestically produced Equipment Purchased by Foreign-Invested Enterprises (repealed in 2010) stipulated that domestically produced equipment refers to equipment manufactured by enterprises within the territory of the People’s Republic of China.

The Notice of the Ministry of Finance and the State Administration of Taxation on Adjusting the Scope of VAT Refund Policies for Domestic Equipment Purchased by Foreign-Invested Projects (repealed in 2011) specified that domestically produced equipment refers to equipment manufactured within the People’s Republic of China and procured as fixed assets under encouraged foreign-invested projects, including accessories and spare parts purchased under the same contract.

It is worth noting that on 5 December 2024, the Notice of the Ministry of Finance on Standards and Implementation Policies for Domestic Products in Government Procurement (Draft for soliciting opinions) was issued. This draft stipulates that:

Products must be manufactured in China, meaning their essential transformation from raw materials or components into finished products must occur within China’s customs territory (excluding OEM or simple packaging). The production cost of Chinese components must meet a specified ratio, which will be determined product-by-product and adjusted dynamically. For specific products, key components must be manufactured in China, and key production processes must be completed domestically. Meanwhile, the standard for domestic products in government procurement currently applies to goods (primarily industrial manufactured products) and excludes agricultural, forestry, mineral, and similar products. In procurement activities, domestic products will receive a 20% price evaluation preference over non-domestic products.

After the Notice is formally issued, relevant departments will, within 3 to 5 years and following consultations with stakeholders (including domestic and foreign enterprises, industry associations, etc.), establish the required cost ratios for the components manufactured in China, as well as criteria for key components and processes for specific products. Prior to this, any product manufactured within China’s customs territory will be treated as a domestic product in government procurement.