By Shen Hengchao, Department of Techno-Economic Research, the DRC

Research Report No 182, 2013

Abstract:

The developed countries have an improved protective government procurement system, which imposes restrictions on non-GPA foreign suppliers by various methods, including giving domestic products special treatment and prohibiting imports to inspire innovation and support certain industries. GPA allows members to decide on the degree of openness through negotiations and by giving equal treatment to suppliers of various countries. Other procurements are not subject to GPA rules. GPA has exception clauses that support innovation, such as small and mid-sized enterprise products, national defense, health and public interest areas, and the technology research and development contracts prior to market competition. China's policies are not sound in providing supports for domestic products and innovation through government procurements and it needs to improve its system, adhere to a more open approach to GPA negotiations, and work on protective procurement methods in accordance with GPA exception clauses.