BEIJING, Nov. 30 (Xinhuanet) -- A research institute under China's top science think tank said on Tuesday that it has terminated a contract to buy a printer chip for 20 times the market price.
The decision came amid protests from critics who had deemed the purchase to be extravagant.
The Chinese Academy of Sciences' national space science center issued an announcement online saying its procurement officers "could not find other suitable chips" when it had agreed to buy the device.
According to an order form published anonymously online, the center agreed in November to pay 6,274 yuan ($980) for an HP 128-megabyte chip to be used in a black-and-white printer. Other products that can be used for the same purpose carry a price of about 300 yuan on the open market.
In a statement released on Tuesday, the center said it never paid the price listed in the contract.
"The procurement procedure is not finished yet," it said.
"The procurement office found the flaws in the contract and therefore did not pay. The contract has been terminated."
The statement also said the center's departments will pay more attention to procurement to ensure that State research money is not misused.
Wang Gangqiang, a researcher on governance with the Chinese Academy of Social Sciences, said the center is not a government agency but is still subject to procurement requirements because it receives public money.
Publicity officials with the Chinese Academy of Sciences declined to say whether anyone from the center will be punished for any irregularities found in the procurement.
Some media have reported that the seller in the chip deal was to be the technology supplier Beijing Huajiang Technology.
Zhou Xuan, who is in charge of the company's government-equipment sales, declined to say if the company had signed a contract arranging for the chip to be sold at the unusually high price to the center.
Following the center's statement on Tuesday, calls to Zhou's cell phone went unanswered.
Zhang Wang, a worker in Zhou's team, said the case is unusual because Beijing Huajiang Technology has set unified prices for each of its products. To sell them to the government, it must first go through a bidding process.
On Tuesday, netizens left 14,500 comments about the case on Yahoo. Most of them denounced the chip contract as being evidence of "corruption".
"It's surprising that an institute that is so aloof in an ivory tower could be so corrupt," said a netizen from Jinan in Shandong who did not identify himself.
Another netizen from Chongqing said there apparently is "a kickback included in this deal".
Previous reports have said that government agencies in Jianyang, Sichuan province, and in Fushun, Liaoning province, had bought iPods under the guise of procuring "portable hard disks" or "USB flash disks".
The misuse of public funds cannot be stopped unless the details of government procurement are made open to the public, said Wang Baoming, an expert at the Chinese Academy of Governance.
"Only detailed budgets can actually enable our people to participate in supervision," said An Tifu, a professor in fiscal finance at Renmin University of China.