What are the inherent risks of Chinese investments undermining national procurement legislation/rules?
Within a decade, China has become a powerful player in the world economy, including global procurement markets. Its participation has been either as a bidder on government and donor projects or as a direct procurer of goods and services by Chinese companies. China has become one of Africa’s largest trading partners, lenders and builders. It uses resource-backed development loans and grants to countries in return for concessions for and procured goods and services from Chinese companies.
China is not immune from the many risks inherent in procurement, and there have been scandals across different continents involving Chinese companies suspected of using bribery to win contacts. However, there is currently little specific research that shows China’s engagement in procurement offers more risks as compared to other countries. Nor is there a clear indication that China is causing the bar to be set lower in countries where it is involved in procurement markets.
In fact, there are indications that the country’s legal framework for anti-corruption is improving. Unlike other G20 countries such as Japan or Germany, China has ratified the UN Convention against Corruption and has also recently modified its domestic legislation to criminalise bribery of foreign officials. Additional comparative research at the country and sector level would be needed to investigate whether China is globally negatively impacting existing procurement practices.
Fagan, C. The impact of Chinese investments on national procurement rules. U4 Anti-Corruption Resource Centre, CMI, Bergen, Norway (2011) 9 pp. [U4 Expert Answer 279]
The impact of Chinese investments on national procurement rules