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China's accession to the government procurement agreement is now on track, according to a senior Chinese official.

"Despite difficulties the Chinese government is confronting in government procurement reform, the government will not renege on its commitment to start accession negotiations at the end of 2007," Zhan Jingtao, director with the treasury department under the Ministry of Finance, yesterday told an EU-China Conference on Government Procurement in Beijing.

The government procurement agreement, under the framework of the World Trade Organization, requires members to be non-discriminative, transparent and to allow competition in procurement procedures.

China's talks to enter the agreement are expected to begin with the European Union and United States, Zhan said.

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Since China implemented the Government Procurement Law in 2003, it doubled government procurement to more than 350 billion yuan in 2006, according to statistics from the finance ministry. The annual savings rate of the funds for government procurement exceeds 10 percent. But the floor is now mainly open to domestic businesses.

Jorgen Holmquist, director-general for the internal market at the European Commission, expects talks between China and the EU to begin as soon as possible.

He said China's "Buy Chinese" policy in government procurement has led to "the current imbalance in terms of respective procurement market access".

Holmquist believes China's entry into the government procurement agreement will help ease the country's trade imbalance, which amounted to $177.5 billion in 2006 and intensified disputes with its main trading partners.

He also pointed out that concerns are rising in the EU as its companies face unequal treatment in bidding for procurement contracts in China.

"More and more people in Europe are trying to find ways to close EU procurement markets and grant access to third countries only on a strict reciprocal basis," he said.

Yesterday, Holmquist handed Chinese authorities a study report conducted by experts from both sides. The study contains several recommendations for further legislative changes to the Chinese government procurement framework in order to ensure compliance with the government procurement agreement provisions.