Green Purchasing in Chinese Large and Medium-sized State-owned Enterprises

Abstract

Although large and medium-sized state-owned enterprises (LMSOEs) play an important role in China’s economy, only in the last two to three years have these enterprises started to focus on environmental developments such as green purchasing in their business practices. As part of an investigation of this topic, a survey and site visits to 28 LMSOEs were conducted on the potential for green purchasing in China. This paper is both a review of the investigation’s findings and an introduction to the elements of green purchasing among Chinese LMSOEs. It first introduces the importance of green purchasing for LMSOEs as it pertains to the marketing of their products. Then it discusses key elements of green purchasing for LMSOEs, which include: (1) the organizational framework; (2) the model of suppliers’ selection; (3) key factors and criteria affecting supplier selection; and (4) the establishment of beneficial buyer-supplier relationships. Lastly, it analyzes the challenges of LMSOEs for green purchasing in the context of the rapidly evolving Chinese economy, and summarizes the progress that has been made. The paper concludes that both Chinese LMSOEs and foreign investment enterprises in China can benefit from green purchasing cooperation if they establish close long-term supplier-buyer relationships.