Yes. Collusive bidding is a crime in China under Article 223 of the Criminal Law when the circumstances are serious, and it carries up to three years of imprisonment or criminal detention plus a fine. A company can be convicted too: Article 231 makes the entity liable for a fine and its directly responsible managers and other directly responsible staff liable under the same provision.

Two forms of the offence under Article 223

Article 223 punishes two situations. First, bidders who collude with each other on bid prices in a way that harms the interests of the tenderer or other bidders, where the circumstances are serious. Second, a bidder who colludes with the tenderer to harm the lawful interests of the state, a collective or individual citizens – punished in the same way even if no competitor suffers a measurable loss. Read together, the provision means the talking itself is the problem, not only the winning.

When does bidding collusion become criminal? The filing thresholds

The Supreme People’s Procuratorate and the Ministry of Public Security set the investigation triggers in Article 68 of the Provisions on Standards for Filing and Prosecuting Criminal Cases (II), which applies to the bid-rigging offence:

  • direct economic loss of RMB 500,000 or more;
  • illegal gains of RMB 200,000 or more;
  • the awarded project value reaches RMB 4 million or more;
  • threats, deception or bribery were used to win the bid;
  • a repeat offence within two years after two or more administrative penalties for collusive bidding;
  • other serious circumstances.

The RMB 4 million project-value trigger deserves attention: it sits well below the value of most construction, energy, IT and medical-procurement packages in China, so a single mid-sized tender can put a bid team inside the criminal range.

What this means in practice for bidders and executives

The evidence in these cases is almost always documentary rather than testimonial: messages discussing price, identical or near-identical bid documents, the same document author or IP address, the same contact person or bank details, a rotating list of winners, or the pattern in which a losing bidder is subcontracted afterwards. Bribery is the most common aggravating prong; any payment, gift or consulting arrangement touching the tenderer’s staff can bring the collusion charge and separate bribery allegations on the same facts.

Administrative consequences run in parallel. Under Article 53 of the Bidding Law, a collusive bid makes the award void, triggers a fine of 0.5% to 1% of the contract value, allows the company to be barred from bidding for one to two years, can end in revocation of the business licence, and requires the case to be referred for criminal prosecution where the conduct amounts to a crime. For a foreign-invested supplier, a bid disqualification and a criminal referral can be as damaging as any fine, because both are recorded and both travel with the group.

A scenario

Illustrative scenario (hypothetical): a foreign-invested equipment supplier joins a tender worth RMB 60 million, and its local partner proposes agreeing prices with two competitors and sharing the packages. Emails set out the price schedule, and a consultant is paid RMB 300,000 to a person close to the tenderer. Both the project-value and illegal-gains thresholds are met, the collusion is documented and the bribery prong applies. Managers are taken in for investigation, the company faces a fine and a bidding ban, and the fact that the compliance team never saw the emails is part of the defence, not a defence by itself.

The bottom line: treat every message about price sent to a competitor as evidence an investigator will eventually read, keep bid preparation inside one controlled channel, and have counsel review consortium, subcontracting and consultant arrangements before the bid goes in.

FAQ

Q: Is bid rigging a crime or only an administrative offence?

A: Both. The Bidding Law allows fines and bidding bans, and Article 223 of the Criminal Law applies where the filing thresholds are met.

Q: What is the maximum sentence?

A: Up to three years of imprisonment or criminal detention, plus a fine, under Article 223.

Q: Can the company be punished rather than only the managers?

A: Yes. Article 231 applies the same provision to the entity, which is fined, and to the directly responsible managers and other directly responsible staff.

Q: What if we discussed prices but did not win?

A: The offence covers collusion that harms the tenderer or other bidders, and using threats, deception or bribery to win a bid is itself an investigation trigger.

Q: Does the RMB 4 million threshold refer to the contract value?

A: Yes – the awarded project value reaching RMB 4 million is one of the triggers under Article 68 of the filing standards (II).

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Wang Guan | Co-founder, Beijing Haolue Law Firm | +86 17813108512