On Procurement Management in China's Big State-owned Enterprises

In China's big state-owned enterprises the system of procurement for project was firstly adopted since 1984, which has made solid progress in establishing a construction market with the principles of openness, fairness and justice. The Bidding Law of the People's Republic of China was passed in 1999, which provides a legal basis for the full implementation of the institutionalized bidding management. The bidding system can solve the problem of information asymmetries during the transaction, reduce the procurement costs, and effectively prevent the corruption. Therefore, more and more big state-owned enterprises and projects have adopted bidding management as a major method of procurement. Currently, procurement management of most big state-owned enterprises in China is still in its infancy, which is adopted only in some limited scope of materials purchasing process, and the management is still in its initial level. This paper investigates the current status of procurement and bidding management in China's big state-owned enterprises, and analyzes the existing problems in details, and provides some corresponding suggestions and management measures both for the state-level policy and firm-level management.