Appeal to EU ahead of talks on government contracts

Beijing yesterday asked the EU to consider the challenges facing the mainland's burgeoning government procurement sector ahead of talks next year to hammer out terms for a World Trade Organisation agreement.

The central government hopes to start talks with the European Union late next year on becoming a signatory to the WTO's Government Procurement Agreement (GPA), a document that would allow mainland and European companies to compete on equal terms for government contracts.

EU officials met government representatives to share their experiences in creating a framework for government procurement.

'We hope that in the course of the negotiations the EU will consider China's special circumstances. This would be in the mutual interest of both sides,' Vice-Minister of Commerce Yu Guangzhou said, adding the special circumstances included a weak legal framework, a lack of specialists in the field, complex operational and oversight mechanisms, and domestic companies vulnerable to international competition.

Ministry of Finance figures indicate that in 2004, government procurement in China totalled 213.5 billion yuan, accounting for 2 per cent of GDP that year.

'According to UN figures, the value of a country's government procurement can be up to 15 per cent of GDP,' Mr Yu said, suggesting there was room for the sector to grow on the mainland.

Wang Shaoshuang, director of the Ministry of Finance's government procurement management division, said national legislation covering the sector was only introduced in 2002.

'Internationally, government procurement already has 200 years of history, but China's system has not been around for very long,' Mr Wang said.

He said there were more challenges than opportunities in opening the sector and many local governments still went down their own path in buying goods and services.

European Commission internal market and services director-general Alexander Schaub said China's needs would be taken into account.

'As a mature and I hope responsible trade partner, the EU is ready to provide assistance and to accommodate, to the extent possible, China's specific needs and interests,' he said.