China Opens Up Lucrative Government Procurement Market

Will abolish three measures linked to indigenous innovation campaign, which favors domestic technology

The EU Chamber of Commerce in China on June 30 welcomed Beijing's repeal of policies said to have blocked firms from accessing some areas of the nation's lucrative government procurement market.

The finance ministry announced earlier this week that from July 1, it would abolish three measures linked to China's indigenous innovation campaign, which aims to encourage the development of domestic technology.

The rules drew fierce criticism from foreign governments and companies, who complained the regulations favored domestic firms and squeezed them out of the government's multi-billion-dollar procurement market.

In April, the chamber accused China of trade protectionism for refusing to grant EU companies equal access to the procurement market.

"The repeal should be welcomed as a step forward towards leveling the playing field," said Davide Cucino, president of the European Chamber. "The repeal represents another step forward following clarification from the Chinese government to the European Chamber in December 2009 that indigenous innovation policies were never intended to be discriminatory."

The U.S.-China Business Council also applauded the changes.

"Though the measures represent only a portion of the full list of regulations that tie indigenous innovation and government procurement, the elimination of these measures is an important step toward fulfilling pledges made by PRC leaders during President Hu Jintao's January 2011 visit to the United States and the May 2011 Strategic and Economic Dialogue," said The U.S.-China Business Council President John Frisbie.

The group said it will be monitoring implementation closely, and will continue discussions with Chinese government agencies to address these and other market access issues faced by American companies.

Copyright Agence France-Presse, 2011, IW Staff

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