China's foundational law governing the 3 trillion yuan government procurement market, the Government Procurement Law of the People's Republic of China, is undergoing its first major systemic revision in 23 years. This marks a deep shift from a "process-oriented" to a "results and performance-based" framework. The draft not only brings all budget-funded procurement under regulatory oversight but also introduces a dedicated chapter on "digitalization of government procurement" for the first time. This elevates full-process digitalization, complete traceability, and comprehensive supervision from recommendations to mandatory legal requirements, highlighting the growing importance of "transparency" and "compliance" in the sector.
Since the current law took effect, the scale of government procurement nationwide has grown from 100.96 billion yuan in 2002 to approximately 3.3 trillion yuan in 2025, accounting for about 2.4% of GDP. In this period, technologies like AI have seen increasing application. However, the scale of procurement has slightly contracted in recent years, with persistent issues like a focus on procedures over results, an over-reliance on tenders, and regulatory gaps in small-value, fragmented purchases. The draft, comprising 10 chapters and 104 articles, directly targets these market challenges. A key change is the expansion of the law's scope, breaking the physical boundaries of the centralized procurement catalog to include previously unregulated small-value purchases. The draft also strengthens the accountability of procuring entities, using big data to build a closed-loop system for pre-event warnings, in-process monitoring, and post-event evaluation, ensuring full traceability, auditability, and accountability. To improve efficiency and fairness, the draft removes the default priority of "open tender," establishing "open competition" as the core principle. It requires procuring entities to choose flexibly between tenders, competitive negotiations, and requests for quotations based on project needs. On the regulatory front, the new "digitalization" chapter mandates the use of electronic trading platforms for full-process electronic management and supports the application of big data, cloud computing, blockchain, and AI. It also calls for unified national standards for electronic trading, promoting data interconnectivity across different levels, departments, and regions to dismantle digital barriers.
The direction of the legal revision aligns with the practices of market leaders. JD.com, leveraging over a decade of experience serving more than 10 million government and enterprise clients, has developed platforms like JD.com Huicai and AI procurement tools, creating a professional digital procurement service. It has pioneered the "business-procurement integration" concept, optimizing supply chain efficiency by connecting information, commerce, logistics, and capital flows. JD.com has built a comprehensive compliance governance system with pillars of standards, systems, technology, and operations, and beams covering supplier access, product listing, pricing, delivery, acceptance, and settlement. This structure aims to elevate procurement from "formal compliance" to "substantive compliance." The draft also includes for the first time the concept of "building a unified national market," positioning fair competition as an institutional safeguard. Standardized product and data categories are critical infrastructure for this market. JD.com's industrial arm developed the "JoyIndustrial" AI model and the "Mercator" standard product database, using deep learning to unify parameters and identify identical products, solving the industry-wide problem of naming chaos and inconsistent standards, thereby laying the foundation for pricing compliance and full traceability. The draft's digitalization chapter mandates full-process supervision of procurement activities, strengthening risk control. Addressing the draft's emphasis on algorithmic fairness and data security, JD.com has established a compliance system with over 160 AI risk identification models, enabling intelligent auditing and risk warnings during product listing, price monitoring, and delivery acceptance, reducing the potential for human interference and rent-seeking.
The law's effectiveness lies in its implementation. JD.com's government enterprise business, in partnership with local governments, has created "sunshine procurement platforms" that have become benchmarks for solving small-value procurement challenges. In Hubei, JD.com partnered with Wuhan Guochuang Capital to launch the "Han e-Cai" platform, which centralizes fragmented procurement needs and digitizes the entire process from budgeting to settlement. It now serves 1,172 government agencies and state-owned enterprises in Wuhan, with over 4,300 procurement accounts and nearly 300 local and national suppliers. In Hebei, JD.com collaborated with Langfang Shucheng Group to launch the "Lang e-Cai" platform, which integrates with JD.com's millions of genuine products. It consolidates fragmented orders into standardized online bulk orders, effectively reducing procurement costs and improving efficiency. The platform ensures local procurement data is captured and all transactions are fully traceable online, solving the core challenges of procurement control, price comparison, and supervision. While general government procurement compliance is the "baseline," industrial goods procurement is a more complex "deep water" area. A key pain point is the lack of a fair price reference. The draft introduces a mechanism for reviewing abnormally low bids. In July 2026, the China Federation of Logistics & Purchasing, together with JD.com Industrial and the China Article Numbering Center, initiated research on an e-commerce industrial goods price index. Based on JD.com Industrial's real transaction data and using large-model product identification technology, the index aims to provide a verifiable price benchmark for state-owned enterprises, curbing inflated prices and vicious competition. JD.com Industrial has also released its "Taipu" digital compliance supply chain solution, building a control tower covering five dimensions: suppliers, products, prices, delivery, and quality. This has helped several central state-owned enterprises upgrade their compliance from managing only acceptance to managing the entire process. As the draft moves towards implementation, digitalization, standardization, and a focus on performance will become the core development directions for the government procurement industry, unfolding a systemic transformation of the rules governing this 3 trillion yuan market to support the construction of a unified national market.
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