The Research Of Chinese Government Procurement Market Opening Under WTO Government Procurement Agreement

Government procurement system has a history of over 200 years, beginning in the end of the 18th century and early 19th century in European countries and the United States. It was established to meet government needs of expense, aiming at reasonable distribution and efficient utilization of public funding. When capitalism became monopolistic, particularly after the prevalence of Keynesianism, government procurement, as a type of consumption behavior with a purpose, guidance and sample effect, became not only the method to optimize government expenditure, but played an increasingly important role in adjusting economic circle, industrial structure, local economic structure and supporting the growth of small and medium-sized enterprises. It became an effective way for countries to strengthen macro-economic control and to promote the upgrading of industrial structure. A rising number of countries take the policy function of government procurement to resolve their economic problems. Government procurement has grown to be one important trade barrier in international economic exchanges.With the boost of economic globalization, the conflict between market liberalization of government procurement and trade protectionism has deepened.Discriminatory government procurement policy has become one of the biggest barriers of trade liberalization. As currently the most influential multilateral international system regarding government procurement, the Government Procurement Agreement under the framework of WTO (GPA) holds the principles of nondiscrimination, open market and special and differential treatment for developing countries. It focuses on the international coordination of government procurement and the regulation of different countries’procuring behavior, with the aim of motivating member countries to open government procurement market and expanding international trade. Due to the enormous potential of Chinese government procurement market, right after Chinese government initiated the negotiation of joining GPA, GPA members urged China to join GPA so that other developing countries would follow suit and international trade liberalization could be promoted. Joining GPA and opening Chinese government procurement market brings both opportunities and challenges to the development of national and regional industry. After joining GPA, certain internal policy function of government procurement will be weakened, and the openness of related industries will be significantly improved, so these industries will enjoy the innovation brought by the escalating competition and the opportunity to explore international market, while at the same time confront the impact and challenge of international competition under the framework of GPA. In light of this, Chinese government procurement system has undergone the transfer from a simple fiscal expenditure administration policy to comprehensive scheme of national public policy function and China turned towards conservative in the negotiation of joining GPA. The opening of Chinese government procurement market reflects clearly the conflicts between trade liberalization and the development sovereignty of developing countries.The dissertation analyzes the current condition of Chinese government procurement and the impact of joining GPA by combining quantitative and qualitative analysis. Using for reference the strategies and experience of opening government procurement market in key members such as the United States, Japan and EU, the dissertation puts forward suggestions on improving government procurement system into one with Chinese characteristics and in line with international government procurement rules.The structure and content of the dissertation are arranged as follows:The introduction reviews the background of the issue, with an overview of primary theories and their deduction, their innovation and drawbacks respectively.Chapter Two summarizes the theories regarding government procurement and the opening of government procurement market, providing theoretical foundation for the analysis in the following chapters. This part also establishes the models of the opening of government procurement, including micro-economic model, industrial economic model and macro-economic model, so as to provide the framework for quantitative analysis.Chapter Three summarizes the current situation of Chinese government procurement market, and analyzing its problems from the perspectives of the scale and scope of government procurement, law, government administration and market transparency.Chapter Four focuses on the impact of joining GPA on the opening of our government procurement market. It starts with the opening level of Chinese industry after GPA, elaborating on the relationship between government procurement and national industry protection and analyzing how GPA developed countries, breaking the non-discrimination constraint, protect their domestic industry through means of compensation trade measures and preferential measures for small and medium-sized enterprises. Then it explores the feasibility of "market for technology" and "boosting indigenous innovation" in the openness of Chinese government procurement market as a developing country, and analyzes the differential treatment of China quoting GPA.Based on the above analysis, Chapter Five proposes the strategies of opening Chinese government procurement market under the framework of GPA:legislative protection, differential opening, technological protection and negotiation strategies.Chapter Six takes early GPA member countries, i.e. the United States, Japan and EU as research subjects, analyzing their GPA opening list (bid list), including central government entities commitment, sub-central government entities commitment, other government entities commitment, service and engineer list and the general notes. Using the above-mentioned models of opening government procurement, it analyses the economic effect of the opening of government procurement in those countries, explaining their bidding strategies of opening government procurement market through summarizing the government procurement’s legal system and societal effecChapter Seven concludes and puts forward suggestions to related policy.The potential innovation of the dissertation mainly represents in the following three aspects:First, from developing countries’ perspective, explore the problem of opening Chinese government procurement market under the framework of GPA, therefore providing novel opinions and argument for resolving the conflicts between international trade liberalization and the sovereignty of developing countries.Second, combining theoretical and empirical analysis, establish micro-economic model, industry economic model and macro-economic model to elaborate on the economic effect of the United States, Japan and EU countries joining GPA and opening their government procurement market, as well as systematically studying their bidding strategies.Third, by employing the cross-disciplinary approach, demonstrate the effect of China joining GPA on government procurement law, function, economy and the development of national industry, proposing the opening strategies for Chinese government to fully exert policy function while integrating with international regulations.