Research on the Recognition of State-owned Enterprises as Eligible Procuring Entities: Focused on China’s Bid to the GPA

Abstract

This paper examines the criteria and pathways for recognizing state-owned enterprises (SOEs) as eligible procuring entities in China’s bid to the Government Procurement Agreement (GPA). As China seeks to align its domestic procurement policies with international standards, the inclusion of SOEs in the GPA bidding list has become a focal point in negotiations. This study explores the key criteria under the GPA for determining procuring entities, specifically “government control or influence” and “for governmental purposes”, and analyzes the classification of China’s SOEs into public welfare SOEs, commercial SOEs, and strategic SOEs. The paper discusses the challenges and opportunities China faces in integrating SOEs into the GPA framework, with particular emphasis on the need for a clear delineation of the public factors involved. Through a detailed assessment of the existing legal frameworks, including the Government Procurement Law and its drafts, the study highlights the gaps and ambiguities in current regulations. The research further proposes a path for China’s SOEs to meet the GPA criteria, while ensuring that sensitive industries and emerging sectors are safeguarded through targeted exclusions. This paper ultimately argues for a flexible and dynamic approach in China’s GPA accession process, advocating for a pragmatic pathway that balances China’s reform objectives, national interests, and international obligations.