The European Commission has launched an investigation into China’s medical devices market amid claims of unfair practices from the Chinese regime toward European Union companies.
The probe is the first under the EU International Procurement Instrument, which aims to promote reciprocity in access to international public procurement markets. It follows long-running complaints from European companies and governments over access to the Chinese market.
The commission said it decided to take action after previously raising the concerns with the Chinese authorities over the issue but receiving no “satisfactory replies or actions.”
“We are launching this investigation with China so that we can achieve a level playing field in our procurement markets for producers of medical devices, on both sides,” Valdis Dombrovskis, the commission’s executive vice-president, said. “Regrettably, our repeated discussions with China on this trade irritant have been fruitless.”
The commission will look into whether the Chinese regime’s measures and practices could create barriers to restrict EU firms’ access to China’s medical devices market.
If the investigation finds that the Chinese regime imposed the unfair practices, it could lead to the bloc placing restrictions on Chinese medical device companies bidding in EU public tenders, ranging from giving a lower score for bidding to full exclusion.
The European Commission’s preliminary assessment indicates that these measures create systemic disadvantages for EU economic operators by favoring domestic products and implementing discriminatory procedures for imported goods. As a result, EU companies face significant hurdles in accessing China’s public procurement market for medical devices, leading to a de facto exclusion of foreign suppliers.
The commission has invited China to submit its views and to enter into consultations to eliminate or remedy the alleged issues.
U.S. Trade Representative Katherine Tai issued a statement on the investigation, saying: “The United States and the EU have worked extensively under the U.S.–EU Trade and Technology Council’s Global Trade Challenges working group in identifying and exploring ways to address the non-market policies and practices used by the PRC [People’s Republic of China] in a range of sectors, including medical devices, to unfairly advantage domestic products and companies and displace foreign products in the Chinese market to ultimately dominate markets globally.
“The International Procurement Instrument is a trade tool that can potentially help address the unfair procurement policies and practices pursued by the PRC, in a manner similar to the way that the United States’ Trade Agreements Act of 1979 already addresses reciprocal procurement.”
The value of China’s medical technology market was estimated at $145 billion in 2022, as reported by Bloomberg, referencing data from the Mercator Institute for China Studies. Among the prominent players in this industry are European giants such as Siemens and Philips. Chinese exports of medical devices to Europe increased by more than 100 percent between 2015 and 2023.
MedTech Europe, a trade group representing Europe’s medical technology sectors, indicated that the Chinese regime’s centralized procurement and the “Buy China” policies make market access for EU firms “challenging.”
“For the medical devices industry, this was in no small part due to China’s staunch protection of its domestic firms. European companies were disadvantaged by opaque approval processes and China’s centralized volume-based procurement directive, as well as the government’s continued provision of direct financial support, tax benefits, and research and development (R&D) support to local firms,” the report reads.
The move follows two investigations by the EU into Chinese producers of solar panels and wind turbines, accusing them of receiving subsidies from the Chinese regime.
