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New Payment System for Government Procurement
Starting on Friday, government procurement by Beijing Municipality will be paid out of a special bank account at the CITIC Industrial Bank, a Chinese bank based in Beijing.

Established by the Beijing Municipal Finance Bureau, the new payment system aims to streamline and control the payment links of the government procurement, said Du Wenlan, director of the Beijing Municipal Government Procurement Office.

Du said that under the new system, the Office will settle accounts of government purchases exclusively through this special bank account. In the past, the payment involves a number of departments of the government, which is not only inefficient but also tends to breed corruption.

Government procurement is being introduced to China as a novel thing beneficial to the development of the market economy. Beijing, which initiated the system in 1997 on a trial basis, will make 4 billion yuan (US$481.9 million) of government purchases this year, sources here predicted.

Nationwide, the size of government procurement is expected to reach 100 billion yuan (US$12.05 billion) this year, but still much lower than the level of developed countries in terms of percentage in fiscal expenditure, according to Chinese specialists.

(Xinhua News Agency September 14, 2002)

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