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The European Union is set to block Chinese firms from taking part in public procurement processes for medical devices valued at 60 billion euros or more annually ($68.9 billion), following a determination that EU businesses face unfair treatment in China.

This decision, revealed by the European Commission on Friday, marks the first use of the EU’s “International Procurement Instrument,” which became effective in 2022 and aims to promote balanced access to markets.

These new limitations are expected to heighten already strained relations with Beijing. Tensions have been mounting due to EU tariffs on Chinese electric vehicles, retaliatory Chinese actions affecting EU-produced brandy, and restrictions on rare earth exports—issues the EU hopes to address during a planned “EU-China summit” in July.
According to the Commission, Chinese firms will be barred from bidding on EU government contracts exceeding five million euros.

An EU representative, citing data from Medtech Europe, stated that the EU’s medical technology sector reached a value of approximately 150 billion euros in 2023. Of this, public procurement made up 70%, with tenders above five million euros accounting for just 4% of the total number but representing about 60% of the overall value.

Winning bids will be required to ensure that no more than half of the medical devices involved originate from China. However, the restriction won’t apply when no viable alternatives are available.

EU member states gave their approval to the plan earlier in the month.

The Commission has earlier reported finding “clear evidence” that Chinese procurement practices favour domestic manufacturers and include conditions that lead to unusually low pricing, unsustainable for profit-driven enterprises.

A Commission official noted that the restrictions would cover a range of products, such as diagnostic imaging machines, prosthetics, and hospital apparel.

China’s commerce ministry previously labelled the EU’s intended actions as “protectionist,” calling on the bloc to adopt a fair and open approach and encouraging both sides to handle disputes through cooperation and dialogue.

The Commission added that China has yet to suggest any measures to address the imbalance, though reaching a deal is still within reach.

Source: Reuters