Cartels, Competition and Public Procurement
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Cartels, Competition and Public Procurement

Law and Economics Approaches to Bid Rigging

Stefan E. Weishaar

Stefan Weishaar explores the ways in which economic theory can be used to mitigate the adverse effects of bid rigging cartels. The study sheds light on one of the vital issues for achieving cost-effective public procurement – which is itself a critical question in the context of the global financial crisis. The book comprehensively examines whether different laws deal effectively with bid rigging and the ways in which economic theory can be used to mitigate the adverse effects of such cartels. The employed industrial economics and auction theory highlights shortcomings of the law in all three jurisdictions – the European Union, China and Japan – and seeks to raise the awareness of policymakers as to when extra precautionary measures against bid rigging conspiracies should be taken.
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Appendix 2: China – an overview of public procurement law

Law and Economics Approaches to Bid Rigging

Stefan E. Weishaar


This chapter will give a general overview of the Chinese public procurement legislation. It starts with a concise and general introduction to the field of law and follows the logic of a procurement procedure from determining the applicable law to the criteria employed in awarding the contract. After covering the field of law in Section 2, the applicable law is considered in Section 3. Issues raised here include the personal scope, thresholds and the material scope. The substantive provisions of the law are addressed in Section 4. Here issues of procedure, transparency of tenders and eligibility requirements for candidates are examined. Last but not least, the award of the contract is discussed. This section touches upon the awarding criteria that may be employed and upon rules that govern the conduct of public procurement authorities in the event of the need to discontinue a procurement procedure. Section 5 closes this overview with a reference to the general provisions. This systematic treatment provides the framework for a clear recognition of the areas of law which need to be fleshed out in more detail in order to provide for an effective treatment of bid rigging conspiracies. Before starting, it should be mentioned that in China the more detailed regulations to implement provisions are often left for state organs to draft, since the laws appear to be rather general and avoid detailed stipulations.

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