Updating govt procurement

Also whether China's SOEs are included should be based on the principle of reciprocity, which means GPA parties should allow the same state sector opening-up as China, instead of China unilaterally expanding its government procurement market to foreign suppliers. China's institutions also have a large scale, but they have the more obvious nature of public utility and thus are more reasonable to be included into the country's GPA accession offer.

China is still a developing country and any exorbitant GPA demands for the opening-up of its government procurement market will not only compromise China's national interests, but also mean it receives unfair treatment. It will also have a negative effect on the GPA's efforts for membership expansion in the future and harm the GPA's long-term development.

China has made tangible headway in its legal framework for government procurement. However, quite a few problems have also been exposed in this process, ranging from the obvious conflicts between the Government Procurement Law and the Law of Tendering and Bidding to the lack of a set of complete system for the Government Procurement Law. At the same time, the lack of standardized procurement procedures, the rigid bidding formality and the failure to meet enterprises' diversified procurement demands have also hampered its efforts to move closer toward the terms of the GPA. All these problems have seriously affected the normal functioning of China's government procurement and slowed its steps toward GPA accession.

In recent years, the EU and other GPA parties have repeatedly demanded China should improve its legal system concerning government procurement to bring it in line with GPA terms. Experts have pointed out that a major challenge to China's GPA accession lies in the adjustment and improvement of its domestic government procurement system, a problem that has not yet drawn enough attention from the government.

For example, no effective measures have been taken to resolve the long-established conflicts between the Government Procurement Law and the Law of Tendering and Bidding, and no supplementary laws and regulations aimed at improving the Government Procurement Law to make it more operable have been worked out since public opinions were solicited in 2010.

China started its GPA accession talks in the context that it has not set up a full-fledged government procurement system and its government procurement market is not fully open to the outside world. Despite progress in the years, it still needs time to align domestic systems in line with GPA rules and requirements.

While taking a positive posture toward the GPA talks, China should also learn from the experiences of other GPA parties and their legislation on government procurement. Otherwise, unfamiliarity with GPA rules after China's accession will not only directly affect domestic enterprises' bid to enter other countries' government procurement markets, it will also cause disputes and conflicts when foreign enterprises enter China's government procurement market. Such a scenario will compromise China's national interests and international image.

The author is a professor with the Department of Law, the Chinese Academy of Governance.

(China Daily 10/29/2013 page8)

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