China Unveils Draft Domestic-Product Criteria for Government Procurement; Industrial Robots Must Have at Least 70% Domestic Components

On October 30, China’s Ministry of Industry and Information Technology and Ministry of Finance released the first draft government procurement criteria for domestic products by product category. The criteria cover five products, including fixed articulated industrial robots and reverse osmosis water treatment equipment. For three products, including robots, components produced in China must account for at least 70% of costs. The transition period for robots is three years, and the public comment period runs from October 30 to November 13.

For robot makers, procurement compliance depends not only on having at least 70% of component costs sourced domestically, but also on carrying out specified processes in China, including reducer machining and servo motor insulation treatment. The draft criteria are designed to assess not just where finished products are procured, but also the supply chains for components and processes. The final criteria and implementation of cost calculations will therefore be key practical issues.

A central feature of the draft criteria is that they set conditions for products covered by government procurement by combining the share of component costs produced in China with the location of key processes, rather than focusing only on final assembly. In addition to a domestic component cost share of at least 70%, industrial robots must undergo specified processes in China: precision machining of reducers, insulation treatment of servo motor windings, and PCB surface mounting. This means that not only finished-product makers’ sourcing decisions, but also the production setups of component makers and companies performing these processes, may affect eligibility for government procurement. Three of the five products, or 60%, are required to have a domestic component cost share of at least 70%; the remaining two have thresholds of 60% and 50%. The draft does not impose a uniform threshold on all products. The transition period is three years for robots, scanning electron microscopes and helicopters, and five years for water treatment equipment and gas analyzers. By setting product-specific process requirements and transition periods as well as component-cost ratios, the framework appears intended to gradually align domestic supply chains with procurement conditions. However, publication of the draft does not mean the final criteria have been determined. The 70% domestic component cost threshold for individual products and the 80% condition used in price evaluation apply to different things. The former is a requirement in the draft criteria for specific products. The latter is a price-evaluation mechanism that applies when qualifying products account for a specified share of the total cost of all products offered by a supplier. Confusing the two would mean conflating the criteria for an individual robot with the conditions for applying bid evaluation. The draft also sets out primary and secondary categories for components, making the method for calculating cost shares and determining component categories key issues in verifying compliance. In a notice taking effect on January 1, 2026, China set out a policy of establishing product-specific domestic component ratios and requirements for key components and processes within five years. The five products covered by the latest draft can be seen as a concrete application of that framework to procurement criteria. The issues to watch are how the ratios and process requirements are handled in the final criteria after the public comment period, and how cost calculations and compliance determinations are implemented. At the draft stage, no record of actual application in procurement or company-by-company compliance has been provided.

The five products covered by the draft are portable Fourier-transform infrared gas analyzers, reverse osmosis water treatment equipment, field-emission scanning electron microscopes, fixed articulated industrial robots, and small and medium-sized helicopters. The required cost share of components produced in China is at least 70% for the first two products and robots, at least 60% for small and medium-sized helicopters, and at least 50% for scanning electron microscopes. The transition period is five years for gas analyzers and water treatment equipment, and three years for the other three products. Domestic production requirements for robots include precision machining of reducers, insulation treatment of servo motor windings, and surface mounting of printed circuit boards (PCBs). Separately, the draft sets out a government procurement mechanism under which, if qualifying products account for at least 80% of the total cost of the products offered by a supplier, bids are evaluated at a price discounted by 20% from the total quoted price for all products.