International Construction Law Review
CORRESPONDENTS’ REPORTS: CHINA
RICO CHAN
Partner, Baker & McKenzie, Beijing
CHINA PROMULGATES GOVERNMENT PROCUREMENT LAW
Introduction
China promulgated the Government Procurement Law (“GPL”) on 29 June 2002 in order to regulate the nation’s fast-growing government procurement market. The GPL, which was approved by the Standing Committee of the National People’s Congress, will take effect on 1 January 2003.
The GPL and its related implementing regulations will replace the Provisional Measures for the Administration of Government Procurement (the “Provisional Measures”), which were issued by the Ministry of Finance in 1999.
The new Law is intended to improve transparency, reduce corruption and lower government costs by providing the rules and process for the purchase of goods, construction works and services by governmental and quasi-governmental entities. According to official statistics, US$12 billion in government procurement has been scheduled for 2002—almost double the 2001 figure—with spending in 2003 expected to be even higher.
Promulgation of the GPL was not required by China’s accession to the World Trade Organization last year. Nevertheless, the GPL is likely to be a step towards China reforming its government procurement market and eventually joining the WTO’s Agreement on Government Procurement (“GPA”).
Scope of application
Entities and purchases covered
The GPL will apply when the following two conditions regarding purchasing entities and types of purchase are both met:
[2002
The International Construction Law Review
532