EU retaliates by shutting out Chinese medical suppliers from procurement contracts

The rift between the European Union and China has widened some more following the European Commission's (EC) latest decision to exclude Chinese companies from EU public procurement contracts for medical devices exceeding €5 million.

The announcement of this measure on June 20 prompted a harsh response from Beijing, as Euractiv reported.

China’s Ministry of Foreign Affairs condemned the decision, asserting that the EU, which “has always claimed to be the most open market in the world,” had “gradually shifted towards protectionism.”

“This is a typical case of double standards,” the ministry’s spokesperson declared during a routine press conference.

The implications could be significant: Chinese exports of medical devices to the EU doubled between 2015 and 2023.

The European Commission defended its decision, stating its primary goal “is to level the playing field for EU businesses. We remain committed to dialogue with China to resolve these issues,” according to Commissioner for Trade and Economic Security Maroš Šefčovič.

This action represents the first time the EU has invoked restrictive tools under its International Procurement Instrument (IPI), which became effective in 2022.

A nine-month investigation concluded in January found that 87% of public procurement processes for medical devices in China systematically disadvantaged European firms.

“[China] has put in place a multilayered overarching system of generally applicable preferences for the procurement of domestic medical devices, which has led to systematic discrimination against imported medical devices and foreign economic operators,” the Commission’s report stated.

The policy also imposes a component limit: winning public tenders must include no more than 50% of parts sourced from China.

However, the Commission noted that exceptions would apply in cases where no suitable non-Chinese suppliers exist.

Brussels reiterated its openness to engagement, stating it is “ready to step up contacts with Chinese authorities to put an end to these discriminatory practices.”

“If China presents concrete, verifiable and satisfactory solutions that effectively address the concerns raised, the IPI framework allows for the suspension or withdrawal of the adopted measures,” the Commission added.

According to the article, EU countries had voted in favour of such sanctions earlier this month in reaction to the legal and administrative barriers imposed by China on European companies.

“The measure seeks to incentivise China to cease its discrimination against EU firms and EU-made medical devices and treat EU companies with the same openness as the EU does with Chinese companies and products,” the commission says.

It also notes that while Chinese medical device exports to the EU more than doubled between 2015 and 2023, China simultaneously imposed “substantial and persistent legal and administrative obstacles” restricting access to its own procurement market.

By Nazrin Sadigova