Chapter 30 1. Government procurement should support local brands

In our country, some government departments often prefer big foreign brands when purchasing, and some even directly express "only purchase imported brands".Even if some domestic brands have advantages in price and quality, they will lose to foreign brands.Is this really worshiping foreigners and fawning on foreign countries, as the public opinion criticizes, or is it true that domestic enterprises cannot meet the relevant standards of government departments.In the past, it was said that we "worship foreign countries and favor foreign countries" because the quality of foreign products is better than ours. Now some of our products have higher quality and technology than similar foreign products. Why does this phenomenon still occur? At the National Two Sessions in 2007, Dong Mingzhu, as a representative of the National People's Congress, put forward two proposals, one of which suggested that government procurement should be inclined to independent innovative enterprises.Dong Mingzhu explained her reason: When the government requests that many of our technologies have exceeded the international level of professional technology, but our government often encounters such a notice during the bidding process: "Only purchase imported brands".It does not require the other party to purchase products that do not meet the quality standards. As long as we meet the same quality standards, the other party should allow us to bid.And I think that when the quality of our local brands reaches or can surpass it, you should choose local brands unconditionally, and you should support the independent innovation of local brands.After years of development, Gree Air Conditioning has become the largest air-conditioning company in the world, with annual sales growing at a rate of 30%. Actively respond and execute, and many technologies have surpassed the international level, but in the government's bidding process, domestic companies are often told that the government only purchases imported brands.

On November 15, 2006, the Hefei Municipal Government Procurement Center issued the "Announcement on the Bidding of the Central Air Conditioning System Equipment of the Comprehensive Building of the Hefei Land and Resources Bureau". Air-conditioning system equipment is subject to domestic public bidding.According to the bidding announcement, the central air-conditioning system equipment for the public bidding of the comprehensive building project of Hefei Land and Resources Bureau includes two screw chillers, two cooling towers, air-conditioning centrifugal pumps and several air-conditioning terminals.Among them, the clear requirements for the complete machine of the screw chiller and the centrifugal pump of the air conditioner are "imported with original packaging from Europe and America".In addition to original equipment, other equipment must be submitted for bidding directly by the manufacturer.The release of this announcement means that domestic giants such as Gree and Haier, which occupy an absolute share of the domestic market and have a place in the international market, are not eligible to participate in the public bidding of the project.Dong Mingzhu is very dissatisfied with the government procurement behavior, including domestic air-conditioning manufacturers are also extremely unfair, which has aroused widespread concern and criticism from public opinion.Although the document was abolished and changed in the end, Dong Mingzhu believes that this is not just a special case, and there are similar problems in many local departments.Previously, Dong Mingzhu saw in the media that a company specializing in highway construction equipment in Henan had reached international standards, but was told during the bidding that only imported brands were selected, and local brands were rejected.In recent years, the Chinese government has increasingly emphasized the independent innovation of enterprises, but the status quo is still not optimistic.

Dong Mingzhu believes that there are three main reasons for the lack of independent innovation capabilities of Chinese enterprises: First, domestic and foreign enterprises enjoy different policy treatment, which makes some entrepreneurs eager for quick success and quick profits to pursue preferential policies, instead of concentrating on business and technological progress; Second, the country's relevant export policies did not support and adjust the differences between self-owned brands and OEM export products, resulting in a decline in market competitiveness; The third is that some entrepreneurs can't bear the hardships of the manufacturing industry and the temptation of other industries and give up halfway.

It can be seen from this that only the third reason is due to the responsibility of the entrepreneurs themselves, while the first two are problems that the government can solve.Gree is a well-known local brand, and it is constantly innovating in the process of learning advanced international experience, and its technology has reached the international level.In 2006, Gree air conditioner was honored as a world famous brand and won the National Quality Award. These awards have very strict management standards.Gree's air conditioners exported are exempted from inspection, and Gree's air conditioners are used even abroad, but they are rejected by some government procurement departments in China.It is understood that most of the so-called foreign brands are also produced in China. They purchase Chinese materials, and their technology and management are at the same level. The only difference is that they have foreign trademarks on them.This is why Dong Mingzhu strongly appealed to the government to be aware of this problem, which is why she submitted the plan at the two sessions.After all, even after the U.S. government is in line with internationalization, it has clearly stipulated that the use of local products in government procurement should not be less than 90%.What's more, for now, Gree air conditioners have reached a high level in the industry both in terms of technology and quality.Entrepreneurs feel comforted that with the conclusion of the two sessions in 2007, the government is actively fulfilling its responsibilities.After the merger of the two taxes, the tax rate for many foreign-funded entrepreneurs, especially high-end technology companies, will rise from about 10% to 25%. This will undoubtedly provide local companies with an opportunity to compete fairly with foreign-funded companies.Specific to the air-conditioning industry, Dong Mingzhu believes that when local brands meet the standards required by consumers, government departments should purchase local brands, such as air-conditioning refrigeration, noise, and energy efficiency ratio. How about using foreign brands instead of local brands?The government proposes to build a harmonious society and develop scientifically. Since we innovate independently and develop scientifically, in such a large market, local products of excellent quality are also available, but we are unwilling to use them. This is not in line with the national conditions.During the two sessions, Dong Mingzhu said in an answer to a reporter’s question: In the process of our development, we have also heard many enterprises eager to get government support. Many people simply think that this kind of support is the government’s allocation of funds to us , or the government will give me a little bit, which is a kind of support.I don't think so. I hope the government's support is a platform that is fair and just.At present, many enterprises in China, especially air-conditioning as an example, are either joint ventures or cooperative enterprises that introduce technology. They do not have a purely local brand, but are all "so-and-so joint venture" brands.As Gree, we have seen this kind of joint venture for the development of our own brand, and I don't think it has much benefit.How to solve this problem?To enable our local brands to have both technology and competitiveness, we need to invest in our research and development efforts to speed up our own product upgrades.

And I think the standard of an enterprise's product management, this standard is the standard recognized by consumers, and it is the standard of your company.So I think the government needs support. What we ask for support in this process is not how much money is given to me as support. I think the government’s financial revenue and expenditure also come entirely from enterprises. If every enterprise asks the government to give me funds, we will What to use to repay the society and support the government, so that our current harmonious society can be fully realized as soon as possible.Dong Mingzhu also said that the government should provide a platform to support local enterprises. In the process of procurement, the government tends to favor foreign brands or domestic and foreign joint venture brands, while completely rejecting local brands. This is wrong. of.Government bidding should set a threshold based on technical standards, rather than formulating a brand.Now in the air-conditioning industry, take Gree Electric Appliances as an example. Gree Electric Appliances now has more than 900 patents of its own and more than 100 invention patents. Thousands of products, its technology has exceeded the international standard.Some patents are developed by Gree itself.For such an enterprise, in the process of government procurement, it should not devote a lot of energy to clearing up work or finding relationships, but should be an open platform to compete.For such enterprises, the government should favor them, because we call on everyone to innovate independently.If the product is so good, why should it be excluded by others? Because local products do not have a "joint venture", so they cannot enter this threshold. This is definitely wrong.As far as the local brand Gree is concerned, the product quality of Gree air conditioners is unquestionable.At present, Gree brand air conditioners have been exported to more than 60 countries and regions around the world.Such as Italy, France, Philippines, Spain, Brazil, Australia and other countries.In recent years, the Gree brand has entered the U.S. market with a high profile, and the sales of self-owned brands have also accounted for an increasing proportion of Gree's global sales.Not only that, Gree has also entered the mainstream sales channels in these countries and regions, and has been recognized by mainstream consumers.For example, in Brazil, Gree air conditioners have successfully entered the large supermarkets in major cities such as Sao Paulo, Rio de Janeiro, Santos, and Victoria with the advantages of complete varieties and superb technology, and set up exclusive cabinets, greatly establishing the image of a famous brand of Chinese household appliances.Many movie stars, football stars and senior government officials in Brazil use Gree air conditioners in their homes.

In March 2006, Gree was awarded the title of "Brazilian's Most Satisfied Brand" by the Brazilian National Bureau of Quality Supervision for its product quality.A powerful product like Gree can get such a high evaluation abroad. If it cannot be recognized by the government in China, it will really be a great irony to domestic companies.Take Hongqi sedan as an example.When the leaders of China got on the Dongfeng car (the predecessor of the Hongqi car) in 1958 and said with emotion, "Sit in a car made by ourselves", they may never have imagined that the Hongqi car, which is the banner of Chinese cars, will one day be was forced to stop production.

On May 14, 1981, the People's Daily published an order to stop production of "Hongqi" cars. Ten years later, the Shanghai brand sedan also announced the discontinuation of production.In fact, in the early days of reform and opening up, Shanghai and Hongqi brand cars once appeared in many government agency compounds.But even in such a favored era, self-owned brand cars are still rare, and the middle and high-end cars purchased by the government are mostly Japanese cars, and Santana and Jetta are increasingly occupying the lowest-end part of the market in government procurement; soon after, Another sudden emergence of Audi.The development history of China's domestic brands of cars is much longer than that of joint venture brands in the Chinese market; however, until today, local brands still cannot completely get rid of the dilemma of brand promotion.If the reasons are investigated, government procurement has unintentionally acted as an obligatory promoter of foreign brands, and placed local companies in a very unfavorable competitive environment.The government should not use most of the procurement funds to purchase foreign brands, but should purchase local brands—since it is a company invested by its own finances, why not give priority to purchases?Otherwise what is the purpose of fiscal investment?Given the current market size of the government's home appliance procurement, even if there is a little more inclination toward self-owned brands, how effective will it be?Of course, there should be a technical standard for government procurement, and those that do not meet the standards, are of poor quality or even waste, of course, should not be procured.Because some enterprises may be more inclined to use domestic products in government procurement, but in fact there are indeed differences in the quality level of some products in China and foreign enterprises.Therefore, even after some measures are proposed, one size fits all cannot be implemented.As a representative of the National People's Congress, Dong Mingzhu hopes that her proposal will make relevant departments pay attention to the issue of government procurement.She looks at this issue not only from the perspective of the enterprise's own development, but also from the perspective of the scientific development of national enterprises.