A Comparison Between WTO Agreement On Government Procurement And China's Government Procurement System With Suggested Measures

Government procurement, originated more than two hundred years ago in the western countries, has experienced rapid development in China in the last decade. As one part of public expenditure management, it not only plays a significant role in improving the efficiency of public money, but also seeks to achieve certain other domestic policy goals through purchasing decisions, such as promotion of local industrial sectors, favour of domestic suppliers over their foreign competitors and environment protection, etc. When government procurement value increases steadily until it reaches 10%-15% of a country's GDP, people realize that governments' protection of this market shall lead to distortions in international trade.The effort to eliminate discrimination against foreign products or suppliers resulted in the birth of Agreement on Government Procurement (GPA), a plurilateral agreement of WTO, which means not all WTO members are bound by it. Members of the agreement are mostly developed countries. China is not one of them.Such a status quo does not mean China's refusal of the agreement for ever. This thesis compares the differences between GPA and China's government procurement system, exposes the problems existing in the latter and analyzes both the benefits and the disadvantages of China's signing the agreement. The author believes that the benefits for China shall be: (1) conform to the world globalization trend; (2)strengthen the government procurement system;(3)improve public finance efficiency; (4)increase the competence of the local enterprises and bring them a much wider international market.But becoming a member of GPA also means some disadvantages for China. They are: (1) the impact of foreign products to the domestic market; (2) large amount of modification of laws and regulations.On the whole, signing GPA means more benefits and fewer disadvantages to China. China should sign the agreement. But in consideration of the country's current conditions, its steps can not go too fast. Gradual advancement is recommended.The author suggests the following measures be taken against the agreement:Firstly, enhance the study of GPA and other WTO laws and perfect domestic laws and regulations;Secondly, make use of the provisions of GPA and reduces the scope of market opening to the minimum;Thirdly, select the sequence and degree of opening according to the development level of the country.Fourthly, increase as soon as possible the competence of the local enterprises.