The European Union’s investigation into China’s procurement of medical devices reveals that the Chinese government shows discrimination against EU companies in public procurement contract bidding processes. This may lead to the EU implementing restrictive measures to prevent Chinese companies from entering the EU market.
The nine-month investigation, based on the EU’s “International Procurement Instrument” launched in 2022 to open up overseas procurement markets, highlights that China’s policies force local hospitals to choose domestic suppliers, creating an unfair competitive environment for foreign companies.
EU Trade Commissioner Maroš Šefčovič expressed hope to resolve the issue through dialogue with China but warned that if consensus cannot be reached, the EU may restrict Chinese companies’ eligibility to participate in EU public procurement contracts for up to five years.
“We prioritize dialogue, but we are prepared to take decisive action to defend fair competition,” he stated.
The report may further escalate tensions in EU-China trade relations. Last year, the EU imposed tariffs as high as 45% on Chinese electric vehicles, prompting Beijing to threaten tariffs on European brandy and pork.
Despite EU imports of medical devices from China doubling from 2015 to 2023, China’s policies still limit market access for EU companies. The EU believes China’s emphasis on the “domestic substitution” policy systematically pressures foreign firms.
The report mentions that high-performance medical devices are a core industry of China’s “Made in China 2025” plan. According to the plan, China aims to achieve a 70% domestic production rate in high-end medical equipment by 2025 and 95% by 2030. This policy has led many provinces to introduce measures supporting local suppliers, such as Anhui Province’s medical equipment procurement regulations.
Additionally, the report criticizes China’s lack of transparency in the medical device procurement process. Data shows that out of 380,000 medical device bidding projects in the past eight years, less than 10% of bidding documents provided accessible qualification criteria, and 87% of bids contained direct or indirect discriminatory clauses.
The European Commission stated that any measures formulated under the “International Procurement Instrument” would adhere to the principle of proportionality and consider supply chain stability. If negotiations fail to address the issue, the EU may reduce or reject Chinese companies’ participation in its market.
Furthermore, EU officials revealed that China had proposed bilateral procurement agreement negotiations but failed to effectively address the problems exposed in the investigation. Šefčovič emphasized that the EU hopes to maintain a fair and reciprocal trade relationship with China but is also prepared to take action.
In recent years, the EU has adopted various legal tools to address unfair trade practices, such as the “Foreign Subsidies Regulation,” which restricts companies benefiting from foreign government subsidies from participating in EU public contract bids or mergers. Although these measures are not explicitly targeting Beijing, they are primarily aimed at addressing issues related to Chinese companies.
As the EU’s policies increasingly align with the US stance on China, economic relations between the EU and China may further tense up. The EU’s publication of the report adds new uncertainty to the future trade dialogue between the two parties.