OEM Into Chinese Enterprises Frustrated Billions Of Dollars In The United Nations List

During the 2007 China (Shanghai) International Procurement Conference held on ~27 September 25th, Li Qiang, director of the Department of international trade and economic relations of the Ministry of Commerce, told reporters that in 2005, the United Nations procurement amount in the world was 8 billion 400 million US dollars, and 2006 was US $9 billion 400 million, almost every year at a rate of around 10%. According to this calculation, it is expected to exceed US $10 billion this year.

But China has a small share of the "big cake" given by the United Nations.

In 2006, the amount of direct purchase by the United Nations in China was only about 88 million 700 thousand US dollars, accounting for only 0.94%.

According to the data provided by China United Nations procurement Promotion Association, the ratio was 0.51% in 2004 and 1.01% in 2005, which has been hovering around 1%.

At the meeting, Wang Ning, Deputy Secretary General of the China United Nations procurement Promotion Association, said that he did not understand the procurement rules and procedures of the United Nations agencies, had difficulty in obtaining information, had difficulties in language and communication, restricted the payment terms, led to difficulties in capital turnover, and needed technical support in the bidding process, all of which hampered the way of Chinese enterprises in the United Nations.

In fact, there are many reasons why Chinese enterprises fail to buy the United Nations.

India is lagged behind by the government procurement of members of the United Nations, bilateral procurement between many member countries, and procurement derived from international development aid agencies such as the world bank. It also refers to and adopts the list of United Nations procurement suppliers. It is estimated that the annual growth of radiation generated by the United Nations is 6-7 times the amount of its own purchases, and it can form a huge market with a total amount of about 35 billion -400 billion dollars.

Among the countries that supplied the United Nations in 2006, the United States ranked first in terms of 526 million US dollars; among the top ten, India ranked second, about 418 million dollars, and Afghanistan, Kenya, democratic Congo and other developing countries also listed them.

"As the third largest trading country in the world, China has only twenty-eighth in the United Nations procurement list, which is not in line with the status of China's manufacturing power and export power."

Li Qiang said.

This does not mean that many products in China are not suitable for the needs of the United Nations.

Wang Ning said, "the United Nations procurement list has products such as food, medical equipment, drugs, tents, motor vehicles, office supplies, clothing, shoes and other products, many of which are China's superior products, with higher production capacity and better quality and low price.

It can be said that Chinese products are the way to the United Nations.

Moreover, because most of the goods purchased by the United Nations are used for humanitarian assistance and post disaster reconstruction, many disaster sites such as Southeast Asia are not only cheap and fast pporting goods from China.

From 2002~2003, the procurement policy of the United Nations began to focus on developing countries. For the first ten countries that supplied the United Nations last year, the developing countries exceeded for the first time for the first time.

But Chinese enterprises have not grasped this opportunity.

There are many advantages to enter the United Nations procurement.

For example, in the export trade, the loss of suppliers is often caused by the buyer's non payment. But the United Nations usually pays the goods about a month or so after the arrival of the goods. It will not default or refuse to pay, it will not receive foreign exchange risk, it will also enjoy tariff free treatment, and there will be no trade barriers.

In the face of various advantages, Chinese enterprises with product advantages are lagging behind. Why?

Li Qiang believes that there are many reasons for this. Although the amount of direct procurement from the United Nations is less than 1%, what is interesting is that many products purchased by the United Nations are truly "made in China": that is, purchasers of other countries purchase Chinese products and paste foreign brands before entering the United Nations procurement system.

RankoVujacic, director of the procurement services office of the United Nations Industrial Development Organization Management Department, said that about 20% of the goods and services purchased by the agency came from China.

There are not only products purchased directly from China, but also Chinese products coming from the third country.

The number of the latter is several times that of the former.

Wang Jun Ning told reporters: "according to incomplete statistics, for example, the goods purchased by the United Nations High Commissioner for refugees in China account for about 40%, while the Chinese products purchased through third countries account for 60%. For example, 1/5 of the products purchased by Denmark from the United Nations are all Chinese products affixed with foreign brands."

The result is that foreign buyers share the profits from "made in China", while Chinese enterprises only charge a small amount of processing fees, and do not become stable suppliers of direct suppliers of the United Nations.

Mr. Qiu, the business manager of Ningbo Binbin Stationery Co., Ltd., told reporters that before 2005, a company in South Africa had participated in the bidding of the United Nations by purchasing their products. If they could have made 10% profits at that time and six of the achievements had been taken away from the South African company, Binbin could only earn three or four yuan.

After several pactions, Binbin began to work directly with the United Nations and become a supplier of the United Nations.

In 2005, its trade volume was $2 million 660 thousand, and it surged to $9 million 320 thousand in 2006.

Secondly, Li Qiang believes that in the United Nations procurement, there is not only physical trade, but also the proportion of service trade.

In 2006, the United Nations purchased 9 billion 400 million dollars in the world, the physical trade was 4 billion 665 million, the service trade was 4 billion 739 million, and the latter even surpassed the former.

China has little service trade.

According to the data provided by China United Nations procurement Promotion Association, last year, the direct trade of China's direct purchase of US $88 million 700 thousand was only about US $17 million 700 thousand, accounting for about 20%.

Li Qiang said that the development of service trade is not equal to the half of the United Nations procurement and has nothing to do with China.

Wang Wang Ning emphasized that China's direct purchase volume accounts for a small proportion of the total amount of the United Nations. It is not that China's products are not competitive with the United Nations. Rather, many Chinese enterprises do not realize that the United Nations is also an object of international trade, or because they do not understand the mechanism of the United Nations procurement. They think that the United Nations procurement has high requirements for suppliers and products, and the bidding procedures are complex, and they have weak communication skills and lack of experience.

In addition, Wang Ning told reporters that some of the provisions of the United Nations do have "harshness".

For example, although the United Nations will pay foreign exchange within one month after receiving the goods, the United Nations has neither prepaid nor letter of credit, and all of the initial investment must be undertaken by the enterprise, which may cause some small businesses to face the problem of capital turnover.