The European Union has decided to restrict the import of medical equipment from China in response to discriminatory practices against foreign manufacturers in public contract bidding by Beijing authorities.
According to the Financial Times on Monday (June 2), the decision, which was passed by EU member states, stipulates that Chinese companies must be excluded from bidding on EU contracts exceeding 5 million euros within the EU for the next five years. This is the first time the EU has taken action under the International Procurement Instrument (IPI) to address market discrimination by Beijing in this sector.
In January this year, the EU pointed out that Chinese policies force domestic hospitals to choose local suppliers. An investigation found that 87% of tender cases involved “direct or indirect discrimination,” including banning imported medical equipment from participating in bidding.
The International Procurement Instrument was established in 2022 to promote a procurement environment consistent with the principles of reciprocity in the EU market and ensuring that foreign companies enjoy fair treatment in the EU public market.
The EU initiated an investigation into the Chinese medical equipment procurement market in April last year. In a report in January this year, it was pointed out that following China’s increasing restrictions on European companies bidding for Chinese public procurement projects in recent years, the European Commission held multiple rounds of discussions with Beijing but failed to reach a resolution.
According to Bloomberg, data shows that China’s trade surplus in the medical equipment sector has turned into a surplus within a year. In 2019, China had a 1.3 billion euro deficit in such products, which turned into a 5.2 billion euro surplus in 2020. The EU believes that this is not a result of natural competition but rather a result of China’s forcibly promoted “Made in China 2025” policy.
“Made in China 2025” aims for Chinese companies to achieve a local market share of 85% in the “core medical equipment parts” market by 2025, 70% in high-end equipment, and 95% in high-end equipment by 2030. The EU criticizes such practices for distorting the market and harming European interests.
While Beijing admits its bias towards domestic products, it claims it has not made international commitments to the public procurement market.
According to the International Procurement Instrument, the EU Commission can take measures against foreign companies, including lowering ratings or outright banning them from bidding.
In recent years, the EU has implemented 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 acquisitions. Although these measures are not explicitly targeted at Beijing, they are mainly used to address issues related to Chinese companies.