Journal of Environmental Protection, 2011, 2, 1034-1045
doi:10.4236/jep.2011.28119 Published Online October 2011 (http://www.scirp.org/journal/jep)
Issues and Challenges in Implementing China’s
Green Public Procurement Program
Yuhua Qiao1, Conghu Wang2
1Department of Political Science, Missouri State University, Springfield, USA; 2School of Public Administration, Renmin University
of China.
Received July 23rd, 2011; revised August 28th, 2011; accepted September 29th, 2011.
ABSTRACT
Sustainable developm ent and environmental protection are th e themes of the day. One popular policy tool that govern-
ment uses to promote sustainable development and to protect the environment is green public procurement. Chinese
government esta blished its public procurement system in the late 1990s. It has moved to implement green procurement
since 2004. In this paper, the authors will first trace the development of Chinese green public procurement program.
The authors will then examine the issu es involved in its implemen tation and make suggestion s as to how to make green
public procurement program more effective. This is one of the first papers examining China’s green public procurement
program.
Keywords: China Green Procurement Laws, China Green Procurement Progra m Im plementation Issues
1. Introduction
Public procurement has always served as a policy tool
[1]. Today, it has been called upon to accomplish another
important mission: to promote sustainable economic de-
velopment and to protect environment. Sustainable pro-
curement is closely related to sustainable development. It
advocates consumption behaviors that have no or little
environmental impact and that are economically sound in
the longer run. Green procurement, also known as envi-
ronmental procurement, eco-procurement or green go-
vernment procurement, is not a synonym to sustainable
procurement. Rather it is a sub-concept referring to the
environmental dimension only [2]. In this paper, the
emphasis is o n C hi na’s green procurement.
As the largest developing country with the fastest
growing economy, China is facing serious environmental
pollution and the danger of depleting some of its natural
resources. Though establishing its public procurement
system just in 1990s, Chinese government has realized
the importance and necessity of using public procure-
ment to protect its environment and to promote the sus-
tainable development. With its huge expenditure, Chi-
nese government’s use of green procurement will have
significant leverage on adjusting the environment, re-
source and economic development.
This is one of the first studies that examines the Chi-
nese government green procurement program. In this
paper, the authors will first review literature about green
public procurement and its implementation in the world,
particularly in the Europe Union, and about the deve-
lopment of Chinese green public procurement. The au-
thors will then examine the issues involved in its imple-
mentation and make suggestions as to how to make green
public procurement program more effective.
2. Literature Review
As China has just established its green public procure-
ment program, little writing has been generated. In this
section, the authors will review literature about green
public procurement development and implementation in
the developed world, particularly European Union so as
to provide insightful understanding about the overall
trend and the implementation.
According to McCrudden [1], government has always
used its purchasing power to achieve policy goals, rang-
ing from the early protecting national industries against
foreign competition to the modern promotion of social
equality. Using purchasing power for environmental pro-
tection and sustainable development is relatively recent.
According to a 1997 Organizations for Economic Coop-
eration and Development (OECD) report, the Danish
strategy to promote sustainable procurement policy in

Issues and Challenges in Implementing China’s Green Public Procurement Program 1035
1991 marked the beginning of such a policy. Then by the
late 1990s, green public procurement became common at
national, regional, and international levels. Such a rapid
development was the response to the serious environ-
mental deterioration and the excessive use of natural
resources and was also pushed by various international
and regional organizations, including the United Unions,
OECD, European Commission, and the World Trade
Organi zations [3].
The United Nations held several conferences in the
1990s to recognize the importance of environmental pro-
tection and human rights. The 1992 UN Conference on
Environment and Development, also known as Earth
Summit, held in Rio de Janerio, Brazil, “was a turning
point for environmental issues” [1]. Over 178 nations
adopted the Rio Declaration on Environment and De-
velopment. A plan of action, referred to as Agenda 21,
calls for governments to adopt action-oriented policies
and goals to encourage governments to use their pur-
chasing power to improve their own environmental per-
formance. In 1997, UN established a Commission on
Sustainable Development to monitor and report on the
implementation of the agreement at the local, national,
regional, and internation al level [1,3]. In the World Sum-
mit on Sustainable Development held in 2002, UN passed
the Plan of Implementation encouraging government to
use public procurement policies to promote sustainable
development and environment protection [4]. UN also
uses its procurement power to influence the actions in
various areas, including environment protection [3].
The 1992 UN Earth Summit pushed the green pro-
curement initiatives in various ways. In 1995, G7 Envi-
ronmental ministers agreed to “green” their own gov-
ernment. In 1996, an OECD Council recommended
members adopt implementation policies to purchase en-
vironmental friendly products and services. In the same
year, “Green Purchasing Network” was established in
Japan and the International Council for Local Environ-
mental Initiatives (ICLEI) launched European Eco-Pro-
curement Initiative. In 1997, the United States federal
government adopted green procurement policy through
an executive order. The coming years saw hundreds of
local leaders from Europe and other areas expressing
their commitment to green public procurement in “Hano-
ver Call” and “Lyon Declaration.” In 2001, an Inter-
agency Sustainable Procurement Group was established
under the sponsorship of multilateral development banks,
UN organizations, and several NGOs [1].
Within the European Union, European Commission
sees environment protection as its central policy goals. It
lays out the major legal framework in several EU direc-
tives and regulations during 2004 and 2006 [1]. EU re-
quires that environment protection be integrated to other
policies and activities. The Commission has urged the
member states to make better use of government pro-
curement to green the market and to promote sustainable
objective. One of the major strategies to promote green
procurement is the use of eco-labels system that certifies
the products meeting the environmental protection crite-
ria. The system was first established at the Community
level in 1992 and further developed and proliferated at
other levels in the coming years. Another strategy is the
environment impact assessment required for all govern-
ment contract works before government makes any deci-
sion [1]. The Europe Union also recommends by 2006
the member states design publicly available action plans
to green public procurement. The plans should assess the
present situation and set up ambitious target for the
situation in three years time. The action plans should also
state clearly what measures will be taken to achieve the
target [5].
The World Trade Organization (WTO) and Govern-
ment Purchasing Agreement, though not expressively re-
quiring green procurement, are interpreted as supportive
for such a use. In general, the WTO considers that the
open, non-discriminato ry, and equitab le multilateral trad-
ing system should not and needs not be contradictory to
actions for environment protection and sustainable de-
velopment. In Government Procurement Agreement – in
the similar frameworks as WTO but with a narrower
group of signatories, there is no specific mentioning of
environmental protection. However, the Sixth Recital of
the Preamble to the WTO agreement recognizes the need
to act in accordance with the principles of sustainable
development and to protect and preserve the environment.
Therefore, it is generally held that GPA allows contract-
ing entities to consider environmental impact when de-
fining technical specifications (including process and
production methods) and selection and award criteria,
given that these actions are non-discriminatory, objective
and verifiable [3,4].
While the OECD countries are leading users of green
public procurement, some developing countries are also
starting to adopt policies to implement it. Various studies
have been conducted concerning the GPP implementa-
tion in the developed world, particular EU members.
According to Classon and Waara [6], EU takes a process
view in its implementation. That is government takes
into consideration the environmental impact in each of
its procurement process—in technical specification, in
technical specifications, in selection criteria, in the
awards of contracts, and in contract performance clauses.
Government usually adopt policies considering the life
cycle cost of a product, giving price preferences to green
products (e.g., recycled products, energy-using devices,
organic products, alternative fuels, clean electricity) and
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Issues and Challenges in Implementing China’s Green Public Procurement Program 1036
encouraging less-polluting manufacturing technologies,
setting aside for greene r products and pr oviding infor ma-
tion provi si on and trai ning [7].
Though the calling for GPP is strong, the commitment
differs a great deal from nation to nation. According to a
2003 study sponsored by ICLEI, Denmark and Sweden
demonstrate the highest level of commitment in Euro-
pean Union [8]. Denmark and Sweden earned the top
rating again in another study that examined only the four
North European countries—Denmark, Finland, Norway,
and Sweden [9]. ICLEI project also demonstrated GPP
can result in great savings. For instance, if all the pub-
lic authorities purchase green electricity, this would re-
duce the gas emissions by 18% of the EU’s Kyoto com-
mitment. Similar savings will occur with many other
green products [4,8].
The report—Green Public Procurement in Europe
2006—sponsored by five environmental organizations,
intended to reveal the state of green public procurement
in 25 EU member states. The study identified “Green 7”
and “Other 18”. The “Green 7” are Austria, Denmark,
Finland, Germany, Netherlands, Sweden, and U.K. The
remaining EU members are “other 18”. The data for this
study are from two sources. One was from the 865 re-
sponses to 8787 questionnaires, an d the other was from a
survey of actual 1000 tender documents. The study also
reveal the inconsistent findings from different data
sources. While 67% of the questionnaire respondents
reported the use environmental criteria in procurement,
the tender documents reveal only 36% of purchases use
some environment criteria. This may indicates the public
personnel exaggerate their actual implementation of
PGG [10,12]. Parikka-Alhola, NIssinen and Ekroos [5]
examined the use of GPP in Finland, Sweden, and De-
mark through the tend ers calls used in 2005. They found
almost one third of the tender calls contain environ-
mental criteria, including environmental policy and en-
vironmental management system, requiring the fulfill-
ment of eco-label criteria, chemical content, recycling or
reuse system, packaging material and noise. They also
found out that public authorities give the average weight
of 3.3% to environmental criteria [5].
In 2007, Stephen Brammer and Helen Walker con-
ducted the “first systematic and comprehensive” study
about sustainable procurement practice among 25 coun-
tries. Questionnaires were sent to 1500 public procure-
ment personnel asking about their use of sustainable
procurement with the maximum level of five. Only 283
responded, and the average rating is 2.82. It is unclear
what this score means.
Many studies are conducted at the national level. A
2004 survey was conducted concerning green procure-
ment in Sweden with a sample of 558 pu blic authorities.
The results show that 15% of the 400 respondents stated
that they always used environmental requirement, 46%
usually did, 27% sometimes did, and 10% seldom or
never do [6]. Prenen reviewed five studies conducted in
Dutch regarding the use of sustainable procurement in
2004, 2006, 2007, and 2008 through questionnaires sent
to public procurement professionals. The percentage of
the respondents who confirm their use of sustainable
procurement varies: 23% in 2004 survey, 32% in 2006
survey, 48% in 2007, and 23% in 2008. Pren en ex amined
the same issue by examining the actual tender documents
and found that only 16% of the contracts he examined
contain “relatively many indications” or “all indications”
(558) that indicate that sustainability was a major re-
quirement in public procurement [12].
These studies also reveal various limitations and ob-
stacles in implementing GPP and SPP. Guntner indenti-
fied several “hurdles,” including lack of support by gui-
delines, a lack of information about the products, their
functionalities and the pr ices, requirement of more work,
and uncertainty of legislation [13]. The 2003 ICLEI sur-
vey found that lack of money was the major obstacle for
countries with high-level commitment and the lack of
environmental know-how for those with low-level com-
mitment. [8]. In the 2004 Sweden survey, almost half of
respondents stated the major obstacle lie in the lack of
the information as to how to formulate environmental
requirements. Approximately a third identified higher
costs, lack of interest, and legal concerns as obstacles [6].
The Green Public Procurement in Europe 2005 and
Green Public procurement in Europe 2006 report that
the perception of high costs was identified as the top
obstacle followed by the lack of knowledge, lack of
management support, lack of practical tools and informa-
tion, and lack of training [5,10].
Carlsson and Waara study the Swedish local govern-
ment procurement agencies. They also identified several
limitations and their impact on the implementation of
GPP. The first one is the lack of administrative resources
(including environmental know-how). As a result, public
procurement officers tend to use easy-to-evaluated envi-
ronmental criteria such as whether the bidder has a cor-
porate environmental policy or not. The second one is
lean budget and the high cost of green products and ser-
vices. Another one is the concern for legal challenge by
unsuccessful bidders and the public procurement offi-
cers’ consequent refraining from using environmentally
related award criteria [6].
While this increasing amount of research is valuable
for us to understand the implementation of GPP in the
developed world, they have several weaknesses. First,
many studies suffer low response rates, and non-re-
sponses are not examined. Second, the responses may be
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Issues and Challenges in Implementing China’s Green Public Procurement Program 1037
biased toward the answers that are political and social
popular. Third, nearly all of the research conducted so far
focuses on GPP in the developed world. This is under-
standable since they are the leading users of GPP. How-
ever, many developing countries such as China, have
come to use GPP and SPP as a tool to protect the envi-
ronment and resource. It is important to examine how
they set up their legal frameworks and what obstacles,
similar or unique, they are facing in their implementation ,
and what lessens and advice the developed countries may
offer them developing countries. In the following sec-
tions, the authors will review the deve lopment o f China’s
GPP development by examining the major relevant laws
and regulations and examine the issues that China faces
in its implementation.
3. China Green Public Procurement
Program
China has a relatively short history of public procure-
ment system. Its public procurement system only started
in the 1990s. Ju, Zhan, Ren, and Yang divide the devel-
opment into three stages. Its embryonic stage covers the
period of 1993-2003 [14]. In 1993, the first procurement
legislation - Bidding Law and Government Procurement
Law- was drafted. Pilot programs of using tendering and
bidding were conducted in Shanghai in 1996 and Shen-
zhen in 1997. This led to a nation-wide public procure-
ment reform and system construction [14]. The most im-
portant achievements in this stage are the establishment
of bidding system for public procurement, the creation of
local government procurement organizations, and enact-
ments of Government Procurement Law and the Clean
Production Promotion Law of the People’s Republic of
China in 2002 [14]. The concept of green procurement
also emerges in this stage. As will be explained later,
both Government Procurement Law and the Clean Pro-
duction Law of the People’s Republic of China are the
center pieces in designing g r e en p ro curem e nt .
The second stage (2004-200 7), saw the enactment of a
few legislations promoting green public procurement to
respond to the emergence of the scientific development
concept that emphasizes “people-oriented” and “a com-
prehensive, coordinated and sustainable development”
[14]. The series of laws include Notification on Re-
source-saving Activities by the State Council Office,
Opinions of Implementing Government Procurement of
Energy-saving Products and Decision on Carrying Out
Scientist Development Concept by Strengthening Envi-
ronment Protection of 2005, and the Opinions on Im-
plementation of Government Procurement for Environ-
mental Labeling Products of 2006 [14].
The third stage, the comprehensive development stage
(2007—the present) is marked with China’s effort to
meet the requirement of the World Trade Organization
(WTO)’s Agreement on Government Procurement. In
this stage China passed various laws to promote further
green public procurement, including National Environ-
ment Protection in 11th Five Year Planning, Energy Sav-
ing and Expulsion Reducing Scheme and Energy Saving
Law, Circular Economy Promotion Law and Public Or-
gans’ Energy Saving Regulations (2008) and the State
Council Office Gave Notice on Forcefully Establishing
Government Procurement System for Energy Saving
Products and Notification on Public Purchasing List of
Adjusting Environmental Labeling Products [14].
3.1. The Legal Sources of China Green
Procurement
Government green procurement in China is set in a series
of laws as highlighted above. Three of the most impor-
tant ones that define the policy goals and directions will
be furthered examined here. The first one is the Clean
Production Promotion Law of the People’s Republic of
China of 2002 [15]. The 16th Article stipulates that gov-
ernments at all levels, in their procurements, should give
priorities to the products that are environmental friendly
and resource-using conservative. This includes those
products that can conserve energy and water and that are
recyclable. The provision also stipu lates that all levels of
government should use advocacy and education to en-
courage the public to purchase and to use environmental
friendly and resource conservative products. Indeed,
the first half of the 16th provision sets government green
procurement policy. The second half sets the policy for
the government to promote green procurement among
the public.
The second important piece of legislation is the Gov-
ernment Procurement Law which began its implementa-
tion in Jan. 2003. The ninth article requires government
procurement to be used for environment protection.
Government procurement should be used to promote
environment friendly productions and to acquire the
goods that meet the environment protection standards. In
other words, government cannot procure the products
whose producing environment does not meet the envi-
ronment standard and cannot procure the products that
do not meet the environment protection standards [16].
The 22nd Article states that suppliers who break the rule
three years should be excluded from the public procure-
ment supplier list.
The third piece is The Circular Economy Promotion
Law of the People’s Republic of China which began its
implementation in Jan. 2009. Article 1 Section 8 requ ires
that governments that are higher than county government
should establish responsibility system to promote circu-
lar economy and should use policy design, fiscal power,
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Issues and Challenges in Implementing China’s Green Public Procurement Program 1038
investment opportunities, and government procurement
power to promote circular economy [17].
3.2. Specific Policy Measures for Government
Green Procurement
Green purchasing list is an important method in China’s
green public procurement. The green purchasing list
consists of two parts: the environment labeling product
public purchasing list and the energy-saving product
public purchasing list [14].
3.3. Energy-Saving List
The energy-saving list covers both energy-saving pro-
ducts (e.g. air conditioners, refrigerators, florescent lamps,
electric water heaters, printers, etc) and water saving
products (e.g., faucets, toilet flush valves, tank fitting,
etc.). In December 2004, the Finance Ministry and the
National Development and Reform Committee issued
Implementation Guidelin es for Government Pro curement
of Energy-saving Products (or The Guidelines). The
Guidelines make it clear that procurement of energy-
saving products is a significant step in reducing govern-
ment energy costs, promoting enterprise development of
new energy efficient technology, expanding energy effi-
ciency market, and raising the public consciousness
about resource, saving energy, protect the environment,
promote the sustainable development [18].
At the same time, the Finance Ministry and the Na-
tional Development and Reform Committee defined the
government procurement scope with the certified energy-
efficient products and issued government energy-effi-
cient procurement product list. If the products provide
the same service and technology, governments should
give priority to procure those on the list. The list contains
eight categories and over 100 energy efficient products.
This is the first Chinese government policy measure that
uses government procurement to promote energy saving
and environment protection [18].
The list has been updated six times during the years
2005, 2006, 2007 and 2009 [19], expanding its scope
from the original 8 categories and 10 products to 30
categories and 40 products. The enterprises that partici-
pated increased from the original 88 to 266 by the third
list. Domestic-produced products have also been added
to the list [14].
3.4. B. Environmental Labeling List
China’s environmental labeling program, established in
1994, has been improved according to the requirement of
International Organization for Standardization (ISO)
14020 series standards. China’s environmental labeling
is consistent with the practice of other countries’ Envi-
ronmental Labeling Programs, such as Japan and Korea,
on certification method and procedure. The environment
labeling products are certified by certification institution
with national certification [14].
In November 2006, the Finance Department and the
National Environment Protection Administration an-
nounced The Implementation Guidelines for Environ-
mental Symbols Products and the first Government Pro-
curement List for Environmental Symbol Products (or
The List). The Guideline stipulates that for any agencies
that rely on government budget, eith er government agen-
cies or service-providing agencies, or associations need
to give preference to environmental labeling products
and cannot procure products that are harmful to the en-
vironment and human health. Environmental symbol
products are those that meet not only the quality re-
quirement but also environmental protection in its pro-
duction, use, and recycling. Compared with products of
the same category, environmental labeling products have
low level of harm and can conserve resources [20].
The Guidelines and Procurement list establish the
green public proc urement system by specif ying the scop e
of government green procurement with a list of green
products and by establishing working procedures and the
specific method and timetable. In order to expand the
green procurement scope, and to increase the effective-
ness and accuracy of the environment-labeling products,
the Finance Department and the National Environment
Protection Administration upgraded the lists in March
2007 and August 2008. More green products are added.
The number of green products after the revision in Au-
gust 2008 was expanded from 14 categories to 19; the
number of enterprises grown from 444 to 760, 71percent;
the product models from the originally 2979 to 7159, a
240 percent increase [20] .
In July 2005, the State Council of the Chinese Central
People Government issued the State Council about
Speeding Up Cycling Economy Guidelines. The Guide-
lines advocate the consumption behaviors of conserving
resources and protecting the environment by using energy-
efficient, energy-saving products, water-saving products, en-
vironment-labeling products, and green symbol food by
reducing over-package and disposable produ ct s, and requi -
ring governments to engage in green procurement. This
document further specifies the direction for public green
procurement [21]. The State Council and Environment
Protection Administration require the Central Govern-
ment and provincial governments to implement green
procurement in Jan 1, 2007 and a full scale of imple-
mentation in all governments to start in Jan. 1 2008 [22].
3.5. Initial Implementation
Implementation of green public procurement program is
only in the initial stage. Green procurement regulations
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Issues and Challenges in Implementing China’s Green Public Procurement Program 1039
and practices are implemented in such cities as Guang-
zhou, Guiying, Shenzhen, Tianjin, Shenyang, Beijing,
and Shenzhen. Qingdao was the first city to issue a green
procurement list and the first city to actually operate
green public procurement in China. Among the many
implementation activities were the Green Olympics -
2008 Beijing Olympic Games [23]. It is so called be-
cause of the implementation of green procurement in
acquiring construction materials, in designing the facili-
ties, and in providing services. The Beijing Olympic
Committee issued the Olympic Project Environmental
Protection Guidelines, the Beijing Olympic Hotel Envi-
ronment Protection Guideline, the Beijing Olympic Or-
ganizing Committee Green Office Guideline and the
Olympic Project Building Guidelines. All of these docu-
ments played an impor tant role in preventing po llution in
designing an d usi n g Ol y mpic stadiums.
In order to promote Chinese sustainable consumption
and green procurement, the Environmental Development
Center of the Environment Protection Administration
have undertaken various research, international coopera-
tion such as conferences and established the Chinese
Green Purchasing Network (CGPN). It has sponsored
several international conferences on green procurement
and sustainable procurement. The project—Sustainable
Public Procurement in Urban Administrations in China—
was implemented in Tianjin, Qinhuangdao and Lanzhou
to mainstream sustainable public procurement in China.
Its first meeting was held in April 2009 [23].
Over past few years, government procurement spend-
ing has increased dramatically. As shown in Table 1, the
overall government procurement increased 37.1 percent
in 2005 over the previous year and 25.7 percent in 2006.
Spending on green procurement is increasing, too. With
the fastest economic growth, Chinese government pro-
curement power will continue to increase.
4. Issues with Implementing China’s Green
Public Procurement
Whether Chinese government can use its green procure-
ment effectively to protect its environment all depends
on how successfully the programs are implemented. The
implementation is influenced by the environments in
which it takes place. This includes the political environ-
ment, economical environment, social environment, the
local culture and tradition, and even technical issues in-
volved in the implementation. In this section, we will
examine various issues involving China’s green public
procurement policy implementation.
4.1. Unfavorable Environments
China’s green public procurement program is facing un-
favorable environments for its implementation. First,
there is a lack of publicity and media promotion. Edu-
Table 1. Chinese Government Public Procurement Expen-
diture in 2005 and 2006.
Government Procurements
(in Millions of Yuan)
Year All Provincial & Local Central
Annual
Increase As % of GDP
2005292,760251,980 40,780 37.1%1.6%
2006368,160321,100 470,60 25.7%N/A
Sources: [24,25].
cating the public about public issues and policies is an
important step in policy implementation. However, in
China little effort has been made to promote the impor-
tance of green procurement or to inform the public about
the content and the goal of public procurement. The
government procurement personnel had little knowledge
about the environment protection. Together with the use
of the lowest bidding selection method, the concept of
green procurement is not well established.
The Chinese public does not pay much attention to
green procurement. They have no or weak sense of eco-
system and environmental protection. According to a
survey, only a quarter of consumers are real green con-
sumers; nearly a third are non-green consumers and
nearly half of the consumers are quasi-green procure-
ment. non-green consumption has a big market. Rural
residents have an even weaker sense of ‘green consump-
tion” than their urban counterparts [26].
In terms of the legal environment, though China has
passed laws to set up a green procurement system, it only
outlines the general requ irements and has not laid out the
rules and regulations. For instance, the ninth provision of
Government Procurement Method states that government
should give priority to high tech products and eco-
friendly products, but it does not define eco-friendly
products and does not specify the importance of green
products.
In terms of market environment, China just started its
green procurement production. Compared with devel-
oped countries, the stru ctur e of green pr odu cts is not well
developed with only a few products currently available.
Technological investment is low. This cannot meet the
demand for green consumption. China has not set up any
program to subsidize green production, and no adminis-
trative departments or environmental protection agencies
have any strategic plans to promote the green industry. In
recent years, some enterprises have used illegal means to
sell non-green products as green products. Some enter-
prises misuse the green product symbols resulting in
non-green products being sold as green products. In
some places, the government illegally approves certain
business to use green product symbols.
In addition, tho ugh the Chinese government advo cated
the production of green products, green products still
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Issues and Challenges in Implementing China’s Green Public Procurement Program 1040
have difficulties entering the market. For example, when
applying for green food production, businesses have to
go through a complicated procedure and must prove they
have large production scale. China has not set any stan-
dard to evaluate small and medium-sized organic farms.
4.2. Problems with Green Public Procurement
Program Management
There are several potential problems with green procure-
ment program management system. First, China does not
have a single designated agency that is charged with
managing green procurement. Several agencies and mi-
nistries are involved in the green procurement manage-
ment, including the Environment Protection Ministry, the
Finance Ministry, the National Development and the
Reform Committee as well as the various procurement
centers at provincial and local levels. They issue regula-
tions either jointly or on their own, causing policy over-
laps, management duplication, and even conflicts among
agencies.
The second problem is related to the procurement or-
ganization. With the absence of a designated green pro-
curement agency, the green procurement is performed by
the procurement centers. These centers do not always
apply their own regulations to guide green procurements,
and their authority doe s not align with responsibility.
There is also a lack of communication and coordina-
tion among public procurement agencies. Communica-
tion involves the exchange of information among public
procurement personnel regarding green procurement po-
licies, method, and procedures. Little attention is paid to
information about green procurement, and little under-
standing is present among procurement personnel.
4.3. Lack of Uniformity in Green Production
Definition and Evaluation Criteria
Any policy design, including green procurement policy,
needs to consider the policy contents, the implementation
method, and procedures. The key to the successful im-
plementation is the standard that is used to evaluate
green products. However, the current green procurement
policy lacks the scientific concepts. This is reflected in
the following aspects. First, the definitions of green
products are not consistent. Different names are given to
green products, including environmental labeling prod-
ucts, energy-saving products, and energy-efficient prod-
ucts. Environmental labeling products that are certified
by the Chinese Environmental Certification Committee
is defined as those that cause no or little harm to envi-
ronment in its production, use, reuse and that are easy for
resource recycling.
Energy-efficient products are defined in The Man-
agement Method for Energy Efficient Symbols issued in
August 2004 by the National Development and Reform
Committee and the National Quality Technology Moni-
toring Bureau. The statement stipulates that the refrig-
erators and air conditioners that are listed in the Produc-
tion list that have P. R. China’s En ergy Efficiency labels
will be posted with five-degree energy efficiency from
September 1, 2005.
The definition of energy-saving product is found in
The Government Procurement Implementation Opinion
for Energy Saving Products, a joint statement issued by
the Finance Ministry and the National Development and
Reform Committee in December 2004. An energy-saving
product is defined as one that meets the safety and qual-
ity requirements of the production category and the effi-
ciency and energy-consumption indicators are the same
as those for the advanced international level or as those
domestic products that are close to the advanced interna-
tional level. Enterprises can choose from the two options
for this symbol.
As shown in the above discussion, environment label-
ing products, energy-saving products, and energy-effici-
ency products share certain commonalities. In some
places, they are all referred to as green products. There is
no one clear definition of green product. This creates
some inconvenience and confusions for both the industry
and the government procurement personnel. Industries
have to spend more time and energy to meet the different
types of labels. Government procurement personnel have
to spend more time and energy to learn about variety of
green product symbols.
Second, green product evaluation criteria are confus-
ing. The Finance Ministry proposes to adopt a universal
standard mandated from the national government. But
the Environment Protection Ministry feels this standard
is lower than the standard set for the environment label-
ing products and cannot achieve the environment protec-
tion purpose. In addition, there is no national environ-
mental protection standard for such products as Xerox
machine, printers, computer or detergents. In summary,
China does not have a uniform standard or criteria for
green product s .
Third, the green product list violates open and fair
competition principle. The first list contains only 856
products of 14 categories. This covers only one to two
percent of government procurement. Even though the
second and third lists expanded the coverage, the list is
still too limited compared with the huge scale of public
procurement and cannot push the public green procure-
ment process. Moreover, the selection process did not
follow fair open competition principle. The products are
selected in an inner circle, not through the competitive
market basis. Lack of fair and open competition can
cause bribery and corruption [27]
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Issues and Challenges in Implementing China’s Green Public Procurement Program 1041
4.4. Insufficient Resources for Public Green
Procurement
Implementing public green procurement requires both
human resource and financial resources and information.
However, the current procurement system suffers insuf-
ficient funding and inadequate information infrastructure.
First, Chinese government has not provided sufficient
human resources for public green procurement. The
government does not have trained green procurement
professionals. Those who involve in green procurement
are from the finance department or are management per-
sonnel. Many of them do not have procurement experi-
ences and know very little about market analysis, pro-
curement cost control, supplier assessment and manage-
ment, procurement contract management, negotiation or
communication. They had even less understanding and
knowledge about green procurement. The members of
public procurement evaluation expert committee are
from all fields and many occupations. Many of them do
not have practical work experience in public procure-
ment. Therefore they tend to use their subjective judg-
ment in deciding the bid. China has not put forward any
formal and systematic training to procurement evaluation
personnel. Most of the training programs are provided by
different agencies, in different jurisdictions in the form
of conference. They cannot guarantee the quality and
effectiveness. In addition, the ethical standard for public
procurement officers is not lifted, and this can leave pub-
lic procurement exposed to potential corruptions and
power struggle.
Second, financial resource for public green procure-
ment is insufficient. Budgeting is important for imple-
menting public procurement programs. Because green
product production requires high technology and the
process are more complicated than other products, the
prices for green products are higher than those for non-
green products. Due to the insufficient budget appropri-
ated to green public procurement, public procurement
agencies often adopt the least-cost bidding selection
method [28]. According to this method, the price is the
most important factor in selecting the bidder given that it
meets the material requirement. In this method, the green
products are put at a disadvantag ed position.
Third, the information infrastructure for green pro-
curement system is lagging behind. Information infra-
structure is critical to a successful implementation. It
allows public procurement agencies to design the pro-
curement plans, to monitor, and to control the imple-
mentation. Implementing public programs is a dynamic
process, involving two types of information: policy in-
formation and implementing status information. Policy
information flows from policy-makers to implementers
and clients. It explains policy and progr ams and how the
policy/program will be implemented. The implementa-
tion information keeps track of the status of program
implementation. In China, there is no one general sys-
tematic mechanism to disseminate the green p rocur ement
information. The main channel right now is media. As a
comparison, developed countries have implemented
electronic information system and high effective trading
method. The implementation information flows from
clients to policy implementers and to the policy makers.
At present, China has little knowledge about green pro-
curement implementation. Public procurement personnel
need to collect green procurement information such as
green product sources and green product rules and laws.
Otherwise, procurement officials do not understand the
impact of green procurement on the environment.
4.5. Relying on a Single Method—
Administrative Means
China uses administrative orders and regulations to im-
plement green procurement within specific functions,
administrative levels and jurisdictional areas. Adminis-
trative method is easy to apply, but lacks legal enforce-
ment power. Government agencies have the options to
implement it, or not to implement it, or compromise the
implementation. In addition, the implementation lacks
legal and economic means. Legal means can standardize
and stabilize implementation. Chinese government has
not provided subsidies to green product industries.
It is important to see that some GPP implementation
issues and obstacles are “universal” in that European
Union members and China are all facing them. The most
obvious examples are the lack of funding and political
support for GPP, and need of training for public pro-
curement professional, and inadequate information infra-
structure. At the same time, China’s GPP program has its
unique implementation problems related to its social,
cultural and political env ironment. As the OECD nations
are leading users of GPP, their experiences can provide
meaningful guidance to China in various areas.
5. Policy Recommendations to Improve
China’s Green Pu blic Procurement
System
Based on the above analysis, the authors believe that the
Chinese government needs to make the following
changes to address the defects in its green procurement
program and implementations.
5.1. Creating a Favorable Environment
China needs to address the legal environment under
which green public procurement is operated. As stated
above, although sev eral law s have been passed, they tend
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Issues and Challenges in Implementing China’s Green Public Procurement Program 1042
to outline the principles, leaving rooms for public pro-
curement agencies not to follow the laws. As a compari-
son, the developed countries implement their green pro-
curement based on legal basis. For example, Japan 2000
Green Procurement Law stipulates that all the central
government agencies must design and implement green-
procurement plan and submit a report to the Secretary of
Environment Protection Ministry; local governments
should try their best to create the annual green procure-
ment implement plan. In the U.S., federal laws and ex-
ecutive orders are used as the major basis for public
procurement. For example, the executive order 13101
requires to “green” government by reducing wastes, re-
cycling resources, and procuring green products [29]. To
enhance China’s legal environment, from the short-term
perspective, Chinese government should issue specific
green procurement regulations to require green procure-
ment under the current Government Procurement Law
and to standardize and direct or compel government
agencies to fulfill their green procurement obligations.
From the long-term perspective, China should consider
adopting Government Green Procurement Law like
many other countries to expressly define green procure-
ment agents and their responsibilities and set green
product standards and the green procurement list. In ad-
dition, the law should avoid multiple definitions by inte-
grating green products with energy saving products.
Second, China should promote green procurement
concept and advocate green consumption among the
public. The government should serve as a role model for
the citizens by following cyclical economy principle to
restrain and standardize its own consumption behaviors
and to design its work plan, to undertake public con-
struction, to procure goods and to manage and use recy-
cling products. Green management should be a part of
government management and a part of the organizational
culture. In addition, government should cultivate green
consumption among the public by engaging green cam-
paign and by organizing annual nation-wide energy-
saving events such as a water-saving week, world envi-
ronment day, earth day or water day as to foster a keen
public awareness of conserving the natural resources and
environmental protection [30].
Third, government should improve the green product
market. Government should increase the investment in
high-technology. Many other countries have produced a
substantial number of green products and green indus-
tries. For example, in America, green products are 80%
of the new products. One thirds of the new domestic ap-
plicants are produced under the “green” banner. There-
fore, China has to increase its investment in high-tech.
Secondly, China should in crease its innovative d iscretion.
China is in the vital stage of technolog y upgrading. It has
to rely on its innovatio n for this upgrading to increase its
competition in the world market and reduce the “green
tariff” in the world.
5.2. Building Green Public Program
Organization Capacity
Chinese government needs to build its organizational
capacity to implement its green procurement. First, gov-
ernment should enhance green procurement leadership
by establishing a designated national committee and
leading organization with diverse representation from
green product experts, green product makers, relevant
government officials and even consumers and civic
group members. This leading or ganization would coordi-
nate and carry ou t the releva nt green procuremen t policy,
specify the tasks for each department, build government
green procurement tracking and report system, evaluate
the implementation, issue green procurement guiding
principle, draft procurement guiding outline, make envi-
ronment information handbook and to promote green
procurement activities.
China should clarify the approach for its green pro-
curement implementation. There are two different ap-
proaches to promote green procurement. One is the top-
down approach as implemented in France where the cen-
tral government makes procurement plan that is executed
by the lower level of government. The alternative is the
bottom up approach used in Swiss where local civic or-
ganizations take the lead while government only pro-
vides assistance. In China, the top down model is more
appropriate. The Government Procurement Law ex-
pressly states that public procurement should be central-
ized. The top down approach also fits China’s setting
better.
Third, Chinese government should promote the inter-
action between environment protection agencies and
procurement agencies. China has upgraded its Environ-
ment Protection Administration into the Environment
Protection Ministry in 2008 [31]. As a way to implement
its mission of protecting environment, the Environment
Protection Ministry should get involved in designing and
publishing various guiding documents and handbooks
and establishing various service centers to provide green
procurement information to public procurement person-
nel. At the same time public procurement agencies
should communicate with environment protection agen-
cies.
5.3. Setting Appropriate Green Procurement
Standards and Criteria
Environment labeling products are the foundation for
green public procurement in many countries. China
should speed up the construction of the environment la-
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Issues and Challenges in Implementing China’s Green Public Procurement Program 1043
beling production certification system and should expand
the procurement list. The list should have a wide cover-
age of products, reflecting the actual need. The process
should be fair and rational in order to avoid distortionary
behaviors and corruptions. Second, the list must be up-
graded constantly. The list should be a dynamic one.
That is, the list should be expanded, adding new products
that are needed to the list and removing those products
whose production technology fails to reach the environ-
ment standard and whose certification period expires. In
addition, China should consider a “green standard”. In-
stead of directly producing the procurement list, the
relevant government standard management agencies set
explicit procurement standard for materials for engines,
electronic, IT products, construction, architecture and
interior design from energy-saving, energy-efficiency
and environmental-friendly products. Such a green stan-
dard will eliminate distortionary behaviors from produc-
ers and corruption that might occur in making procure-
ment list. The disadvantage is that the procurement per-
sonnel cannot tell which product is green, and this makes
it less operational [32].
5.4. Increasing Human Resources for Public
Green Procurement
As China expands the scope for government procurement
and as the system is getting improv ed, it will need a larg e
number of procurement personnel and supply agents. It is
imperative to have an effective green procurement per-
sonnel management strategy and to set up training cen-
ters for green procurement personnel. The training
should focus on general skills, communication skills,
product knowledge, thinking and analysis skills. In many
countries, universities and research institutes provide
procurement courses as a part of the degree curriculum
[33]. Chinese higher education institutions should con-
sider offering public procurement programs or joint pro-
curement programs with government.
Second, we need to speed up professional certification
system. In Britain, government procurement officer as-
sociation proposed training for procurement personnel in
1931. British Public Procurement Research Institute was
established in 1949 to facilitate certifying process. Can-
ada established a training and certification program for
the procurement personnel nationwide [33]. China
should establish a professional certification system as
soon as possible to speed up management skills, p ractical
skills, and personnel quality.
5.5. Building Green Public Procurement
Information Infrastructure
Environment information is essential for green public
policy making and for issuing procurement list. In Japan,
its government pays great attention to standardizing, ob-
taining and disseminating environment-protection infor-
mation. China should set up the product environment
information standard, announce the actual implementa-
tion of green public procurement, create supervising
mechanism for the People’s Congress and for the public
over green public procurement implementation. China
should provide an information platform where procure-
ment personnel and the suppliers can obtain green pro-
curement information and the most up-to-day green
product information and technology information and
where green product list and green procuring agency
names are announced at certain intervals.
5.6. Facilitating Green Procurement with
Subsides and Tax Policies
As the production cost for green products is higher than
non-green produ cts, the Chinese government should also
consider providing subsidies to allow procurement to
procure green products at a higher than the market price.
Many countries adopt this policy and it has proven suc-
cessful [34]. In addition, gov ernment should also provide
subsidies to green product enterprises and developers to
help them to cover their production cost and to encour-
age more businesses to engage in green product industry.
In addition to subsides, the government can use tax
policy to influence the green consumption by providing
tax breaks to encourage green production and green
consumption and by levying higher taxes (e.g., higher
value-added tax and resource excise) on those products
that cause pollutio n and over-consumption.
6. Conclusions
With its huge and ever-increasing procurement power,
the Chinese government has the capability to protect the
environment through its green procurement programs.
Though relatively late in adopting public procurement
systems, China has created green public procurement
policies through a series of legislations and administra-
tive regulations and has started to implement them. The
focus of this paper is to examine the issues involved in
its implementation and make suggestions as to how to
make green public procurement program more effective.
Implementing China’s green procurement program
will be a gigantic task for the Chinese government. It
needs to address a series of issues and need to watch and
study its policy and the implementation constantly. In-
deed, implementation of green public procurement also
opens tremendous opportunities for research, both theo-
retical and empirical. How should be policy be fine-
tuned? How should the structure be modified? What are
some good practices for effective green public procure-
ment? How does the organizational structure affect its
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Issues and Challenges in Implementing China’s Green Public Procurement Program 1044
implementation? How costly is the green procurement?
How effective is the green procurement on the environ-
ment? As little research has been conducted about green
public procurement, the authors would like to invite
more researchers to study this rich area so as to provide
more insight about how to improve China’s green pro-
curement programs.
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