EU wants to edge out China in public contracts

The European Union has proposed a major overhaul of its government procurement rules, aiming to encourage member states to favor domestic companies over Chinese bidders in public contracts. This reform, unveiled by the EU executive on Wednesday, seeks to bolster European industries and reduce the bloc's economic reliance on rival nations such as China and the United States.

Public procurement in the EU is valued at €2.6 trillion ($3 trillion) annually, accounting for 15% of the bloc's economic output. Approximately €600 billion in public contracts are tendered across the 27-nation EU each year.

EU Industry Chief Stephane Sejourne emphasized the strategic importance of this proposal, stating that it will cut the number of rules from 900 to 200 and create a single European platform for public tenders. By streamlining the process, the reform aims to make it easier for smaller companies to compete for public contracts, as they will encounter less paperwork.

Additionally, the new framework will enable local authorities to consider factors beyond price, such as security of supply, sustainability, and European preference, when assessing potential providers.

The EU believes that many local authorities are currently underutilizing existing provisions that allow them to choose European companies over foreign firms. Sejourne highlighted that it is ultimately up to local authorities, national governments, municipalities, and regions to set and apply these criteria. As a concrete example, he noted that Brussels cannot be held responsible if local authorities opt for Chinese buses. Instead, the EU is empowering these entities to prioritize European buses and other local products.