Findings of a Commission’s investigation revealed China has systematically discriminated against imported medical devices in public procurement, the EU is now weighing countermeasures.
ADVERTISEMENTThe European Commission has presented “clear evidence” of China unfairly restricting access for EU medical device producers to its government contracts, according to a report released by the executive today.
The findings mark the conclusion of the first-ever investigation under the new International Procurement Instrument (IPI), which entered into force in August 2022 to ensure equitable opportunities for EU firms bidding for contracts outside the bloc.
In a statement, trade Commissioner Maroš Šefčovič highlighted the EU’s commitment to maintaining open, fair, and mutually beneficial trade relations with China, including on public procurement.
“However, openness needs to be reciprocal,” he continued, saying that while EU government contracts are accessible to non-EU entities, European firms deserve similar treatment abroad.
Belgium, France, Germany, Ireland, Italy and the Netherlands are among the world’s leading exporters of medical appliances, some ranging from high-tech X-ray machines and pacemakers to commonplace contact lenses and sticking plasters.
‘Buy China’ policy under scrutiny
The investigation focused on China’s government procurement law, which enforces the so-called “Buy China” policy which mandates government entities to prioritise domestic goods, services, and projects, with few exceptions.
This involves complex certification processes, non-transparent approval systems, clauses citing “national interests” to exclude foreign companies, and pricing demands that foreign manufacturers find impossible to meet, according to the report.
The report cited the Made in China 2025 Strategy, which sets ambitious targets for hospitals to procure domestically produced mid-to-high-end medical devices. The goal was for such devices to represent 50% of hospital purchases by 2020 and 70% by 2025.
The investigation’s findings revealed increasing barriers to EU-made medical devices in China’s procurement market. For instance, in Guangdong Province, the number of “approved” imported medical devices fell from 132 in 2019 to just 46 in 2021.
Other provincial authorities have issued explicit statements discouraging the purchase of imported devices, favouring domestic alternatives instead, the report said. An analysis of more than 380,000 procurement tenders conducted from January 2017 to May 2024 found that 87% contained restrictions against foreign medical devices, either explicit or implicit.
Evaluating countermeasures
The EU is now assessing what countermeasures might be necessary to restore the EU-China level playing field in this area.
China remains a significant trading partner for Europe’s medical technology industries. According to Medtech Europe, the trade association that represents Europe’s medical technology industries, the country accounted for 11% of the sector’s export destinations in 2022.
However, the EU stressed the importance of ensuring balanced and fair trade practices with China. “EU is committed to engaging China constructively to resolve the issue, but without an acceptable solution, we’ll look at all options,” said a Commission spokesperson.
Possible measures under consideration include restricting or excluding Chinese firms from participating in EU government contracts, applying limits to tenders exceeding certain thresholds, or adjusting scoring criteria to reduce the competitiveness of Chinese bidders.
