EU Launches Investigation Into China’s Medical Device Market

EU has decided to take action after raising the concerns with the Chinese authorities over the issue but received no ’satisfactory replies or action.’The European Commission has launched an investigation into China’s medical devices market amid alleged unfair practices from the Chinese regime towards European Union companies.The probe was “in response to measures and practices in the Chinese procurement market for medical devices which discriminate unfairly against European companies and products,” the Commission announced in a press release on April 24.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 received 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,” Commission Vice-President Valdis Dombrovskis 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.Related StoriesIf the investigation finds the Chinese regime imposed such unfair practices, it could lead to the bloc placing restrictions on Chinese medical device companies bidding in EU public tenders, from giving a lower score for bidding to full exclusion.The EU’s official journal listed several alleged unfair practices and measures implemented by China’s state-run entities at local and central government levels. These include policies that favor domestic procurement, restrictions on the importation of medical devices, and conditions in China’s centralized procurement process that lead to abnormally low bids, making it difficult for profit-oriented companies to compete.The European Commission’s preliminary assessment indicates that these measures create systemic disadvantages for Union 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 consultations to eliminate or remedy the alleged issues.U.S. Trade Representative Katherine Tai issued a statement on the investigation.“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 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,” she said.The Chinese regime has long used non-market measures, such as substantial subsidies, favorable loans, and tax incentives, to support its domestic firms at the expense of foreign companies.China’s medical technology market was estimated to be valued at $145 billion in 2022, as reported by Bloomberg, referencing data from China research group Merics. Among the prominent players in this industry are European giants like Siemens and Philips. Chinese exports of medical devices to Europe increased by over 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.”“We hope that this investigation will lead to a meaningful dialogue with China and that the concerns highlighted in the investigation can be addressed through dialogue, eliminating the necessity of implementing (additional) measures in the EU procurement market,” a spokesperson of Medtech Europe said in a statement to Euro News.The European Chamber of Commerce in China, in its report last year, stated that about 80 percent of EU medical firms operating in China complained about a worsening business environment in the country.“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 centrali

EU Launches Investigation Into China’s Medical Device Market

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EU has decided to take action after raising the concerns with the Chinese authorities over the issue but received no ’satisfactory replies or action.’

The European Commission has launched an investigation into China’s medical devices market amid alleged unfair practices from the Chinese regime towards European Union companies.

The probe was “in response to measures and practices in the Chinese procurement market for medical devices which discriminate unfairly against European companies and products,” the Commission announced in a press release on April 24.

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 received 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,” Commission Vice-President Valdis Dombrovskis 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 the Chinese regime imposed such unfair practices, it could lead to the bloc placing restrictions on Chinese medical device companies bidding in EU public tenders, from giving a lower score for bidding to full exclusion.

The EU’s official journal listed several alleged unfair practices and measures implemented by China’s state-run entities at local and central government levels. These include policies that favor domestic procurement, restrictions on the importation of medical devices, and conditions in China’s centralized procurement process that lead to abnormally low bids, making it difficult for profit-oriented companies to compete.

The European Commission’s preliminary assessment indicates that these measures create systemic disadvantages for Union 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 consultations to eliminate or remedy the alleged issues.

U.S. Trade Representative Katherine Tai issued a statement on the investigation.

“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 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,” she said.

The Chinese regime has long used non-market measures, such as substantial subsidies, favorable loans, and tax incentives, to support its domestic firms at the expense of foreign companies.

China’s medical technology market was estimated to be valued at $145 billion in 2022, as reported by Bloomberg, referencing data from China research group Merics. Among the prominent players in this industry are European giants like Siemens and Philips. Chinese exports of medical devices to Europe increased by over 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.”

“We hope that this investigation will lead to a meaningful dialogue with China and that the concerns highlighted in the investigation can be addressed through dialogue, eliminating the necessity of implementing (additional) measures in the EU procurement market,” a spokesperson of Medtech Europe said in a statement to Euro News.
The European Chamber of Commerce in China, in its report last year, stated that about 80 percent of EU medical firms operating in China complained about a worsening business environment in the country.

“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 wrote.

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.

In September 2023, the European Commission also started to open an anti-subsidy probe into Chinese electric vehicles (EVs). In Europe, China’s EVs enjoy a lower tariff of 10 percent, and its green policy has opened up opportunities for them in the bloc. As a result, EU automakers are losing the EV competition in their own market, mainly to Chinese competitors.

Reuters contributed to this report. 

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