Economy

Opening govt procurement market good for China: Lamy

By Ding Qingfen and Li Xiang (China Daily)
Updated: 2010-09-08 10:08

Pascal Lamy, director-general of the WTO

XIAMEN, Fujian - China's willingness to open its government procurement market wider is in the interest of its own economy and will benefit other economies as well, the World Trade Organization (WTO) chief said on Tuesday.

"The real question is whether China believes opening its procurement market to the world is good for itself and my answer to that is it would be good," Pascal Lamy, director-general of the WTO told China Daily while attending the World Investment Forum in Xiamen, Fujian province.

China would benefit from foreign know-how in key areas while the opening of its government procurement market will benefit other countries as well, he said. Vice-President Xi Jinping said that the government will adopt an open and transparent plan to let foreign companies enjoy equal treatment in construction projects and government purchasing.

Beijing recently added 15 government departments under the State Council's ministries in its latest bid to join the Agreement on Government Procurement of the WTO.

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The United States and the European Union welcomed the move but are still requesting the expansion of procurement entities to local governments and State-run enterprises. China entered the WTO in 2001 without joining the government procurement agreement, which regulates trade in public-sector purchases.

Western countries have been pushing China to join the agreement so foreign bidders can gain access to multi-billion-dollar State contracts and government purchasing.

In July, China took a step forward by making significant changes in a revised proposal, which lowered the threshold for contracts and expanded the range of procurement entities. The implementation period was also reduced to five years from 15 years.

In the meantime, trade tensions between China and the US are growing and China is likely to face a fresh wave of trade sanctions and protectionist measures as US midterm elections are approaching.

Lamy pointed out that the trade imbalance between China and US should be addressed through the adjustment of each country's macro-economic policies rather than pointing fingers at each other's trade practices and policies.

The US Commerce Department recently declined to investigate allegations that China's currency policy effectively acts as an export subsidy on products such as aluminum.

Although Washington rejected an industry proposal to levy duties on imports of aluminum and glossy paper from China, experts said it did not signal an end to its trade protectionist measures against China.

China's trade surplus widened in July to an 18-month high of $28.7 billion which has fueled complaints by some US politicians who want Beijing to allow the yuan to rise or risk a backlash from the US Congress.