3 - Reciprocity in access to public procurement in China

Europeans have yet to agree internally on how to secure reciprocity in public procurement. Meanwhile, member states secured their own deals with Chinese companies.

Europeans want fair competition and equal access to the Chinese market for public procurement but differ on how to achieve this. European companies rarely win contracts, partly because China has not yet joined the WTO’s Agreement on Government Procurement (GPA). China’s last offer, in November, is still under examination but initial reaction suggests that it is insufficient. Trade Commissioner Karel De Gucht, a strong proponent of reciprocity, pointed out that “foreign actors are simply not winning contracts unless it is in China’s interest”. Similarly, Internal Market Commissioner Michel Barnier said that European enterprises “should enjoy the same treatment in China that Chinese enterprises enjoy in Europe – neither more nor less”.

In 2011, the European Commission launched public consultations on an instrument for reciprocity in public procurement with China and other non-signatories to the GPA. Negotiations among member states have not yet started but there are fault lines among them: some such as France and Spain want full reciprocity; others such as Germany and the UK prefer positive reciprocity with mutual opening; and others still such as the Netherlands are against reciprocity altogether.

While negotiations on reciprocal relations have yet to begin, member states competed with each other to cut deals with Chinese companies. The UK bilaterally sought reciprocity intheinfrastructure sector by attempting to attract investment by Chinese companies in return for better access for British companies in China. Chinese companies are increasingly involved in European public infrastructure projects but controversy has surrounded some of them. In the summer, the most famous deal – a contract from the Polish government for the Chinese company COVEC to build a stretch of highway – collapsed. The official explanation was an increase in the price of raw materials but COVEC was also having trouble with EU labour laws and other standards. The Chinese banks involved, the Export-Import Bank of China and the Bank of China, have not yet fulfilled their financial obligations.