The EU restricts imports of Chinese medical devices

The EU member states have voted to restrict imports of Chinese medical devices under the International Procurement Instrument (IPI) to counter what they claim as Beijing’s “discrimination” against foreign manufacturers in public procurement. Under the IPI, Chinese companies will be banned from participating in EU public tenders for medical devices worth more than 5 million euros for the next five years.

According to reports, this marks the first time the EU has used the IPI regulations to take measures against relevant companies since the instrument came into effect in August 2022. Against the backdrop of increasing economic uncertainty caused by the U.S. significant tariff hikes, this move may further escalate trade tensions between the EU and China.

In recent years, the global competitiveness of emerging economies like China and their enterprises has been increasingly growing, with these companies gaining business opportunities in the EU’s government procurement market. However, the EU claims that EU companies have not obtained “reciprocal” market openness. Against this backdrop, the EU introduced the IPI regulations in 2022, authorizing the EU to investigate non-EU companies and take punitive measures such as restricting their access to the EU market. Industry insiders believe this imposes significant restrictions on companies participating in EU government procurement projects, particularly targeting emerging economies like China, which will have a major negative impact on Chinese companies operating in the EU, especially Chinese engineering firms.

On April 24, 2024, the EU announced a nine-month investigation into China’s public procurement in the medical equipment sector under the IPI, marking the first investigation under the IPI measures. On the same day, the China Chamber of Commerce to the EU issued a statement arguing that the EU’s launch of the investigation should be based on comprehensive and objective facts. It suggested that the EU may have insufficient understanding of China’s latest policies to ensure equal participation of domestic and foreign-funded enterprises in government procurement and actively promote investment 对接 (investment matchmaking) in the medical sector.

In its latest statement issued on June 2, the China Chamber of Commerce to the EU particularly pointed out that the pursuit of so-called “market equality” cannot be divorced from the logic of history and reality. For a long time, European medical device companies have enjoyed the dividends of a highly open Chinese market, deeply participated in the modernization process of China’s medical system, and achieved remarkable development. The EU’s decision on June 2 failed to fully consider this context, which will impact the foundation of mutual trust and cooperation accumulated over the years between China and the EU in the medical field.

Reuters said there is still a possibility of an agreement between China and the EU to avoid the EU taking relevant measures. According to the schedule, the European Commissioner for Trade and Economic Security, is scheduled to meet with Chinese Minister of Commerce in Paris on Tuesday local time.

A spokesperson for China’s Ministry of Commerce said on the 3rd that the EU’s decision and discriminatory measures not only harm the interests of Chinese companies but also use unilateral tools to disrupt fair competition and build new trade barriers. China firmly opposes this protectionist practice. It is hoped that the EU will correct its wrong approach. China will closely monitor the EU’s subsequent actions and take measures to resolutely safeguard the legitimate rights and interests of Chinese enterprises.