China will start negotiations about joining a global organization that will allow its firms to bid for government contracts around the world.

Yu Guangzhou, China's vice-minister of commerce, said yesterday the country would join the Government Procurement Agreement (GPA) by the end of next year.

When China joined the World Trade Organization in 2001, it promised to initiate negotiations for membership in the GPA "as soon as possible."

The GPA allows companies from any member economies to bid for government procurement contracts in other member economies.

Yu said China had carried out a series of measures to prepare the way for joining the GPA.

China has issued the Government Procurement Law and relevant regulations as the basis of the country's procurement system.

The government is also trying to improve transparency in government procurement, the vice-minister said.

"In all sectors that have so far been opened to foreigners, non-Chinese suppliers enjoy the same opportunities as local firms when they compete for government projects," he said.

The country has also begun talking to GPA members.

It recently began a series of technical co-operation activities with the European Union in a bid to provide both sides with a better understanding of each other's procurement policies.

"The European Union is a major trading partner and China has become our second largest supplier, so opening up our government procurement markets to each other's suppliers would be a natural extension of these developments," said Charlie McCreevy, the European Commissioner responsible for the internal market.

However, the country still faces a number of problems before it can join the GPA.

Yu said China's government procurement system was not as complete as in certain Western countries.

China's legal framework is not good enough, and the sector lacks specialists and complete operational mechanisms.

China should open the government procurement market gradually, suggested Feng Chun, an expert with the Central University of Finance and Economics.

He said the timetable for opening up would vary according to different regions and different industries.

The government should also pay attention to the protection of domestic companies at the same time as opening up the market, Feng said.

Government procurement is a significant part of a national economy, covering a range of sectors, such as commodity trade, service trade and public works.

(China Daily May 17, 2006)