EU launches probe into China's medical devices procurement

Brussels [Belgium], April 25 : Launching an inquiry against China for allegedly favouring its domestic companies in tenders for medical devices, the European Commission said it is weighing possible tit-for-tat measures, Euronews reported.
This move comes amid longstanding grievances from EU regarding alleged discriminatory practices that hinder European companies from accessing China's lucrative medical device market.
Brussels has long accused Beijing of employing distorting and discriminatory practices, noted the European Commission. These practices, which include stringent certification processes, opaque approval systems, and demands for abnormally low prices, have created significant barriers for European manufacturers seeking to compete in China, as reported by Euronews.
According to reports, the EU's medical device industry has faced challenges due to China's "Buy China" policy, which prioritises domestically made products in public tenders. This policy shift has impacted leading exporters of medical appliances in Europe, including Germany, the Netherlands, and France, who produce a range of high-value medical devices.
The probe, announced by the Commission, will investigate feedback from member states and businesses, engaging in dialogue with Chinese representatives over a period of up to nine months, with a potential extension of five months.
"If the investigation confirms the existence of the suspected practices," stated the Commission, "retaliatory measures on China could be considered to ensure fair competition." These measures could include restrictions on Chinese companies' participation in public procurement across the EU, a market valued at over 2 trillion euros.
Alternatively, the Commission may opt for more targeted measures, such as limiting prohibitions to tenders above a certain value or imposing conditions that disadvantage Chinese applicants.
The European medtech industry has voiced concerns over the challenges posed by China's procurement policies. Medtech Europe, the trade association representing European medical technology industries, highlighted the importance of meaningful dialogue with China to address market access issues.
"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.
China remains a significant trading partner for medical equipment in Europe, accounting for 11 per cent of the market's export destinations in 2022, according to the trade association.
The probe marks the first application of the International Procurement Instrument (IPI), a legislative tool aimed at addressing unfair competition faced by the EU from countries like China.
China's heavily centralised economy has drawn criticism from Western allies for employing various tools to favour domestic companies over foreign competitors. This has led to increased tensions and prompted collective efforts to protect against perceived economic threats, according to Euronews.
In addition to the probe into medical devices, the Commission has conducted unannounced inspections at the offices of a Chinese company in Poland and the Netherlands under the Foreign Subsidies Regulation. These actions follow investigations into Chinese producers of wind turbines and solar panels suspected of benefiting from state subsidies.
Furthermore, the Commission is nearing completion of an inquiry into China-made electric vehicles, which could result in increased tariffs to counter the advantage gained from state subsidies.
"China is for us simultaneously a partner, an economic competitor, and a systemic rival. And the last two dimensions are increasingly converging," Margrethe Vestager, the European Commission's executive vice president, said earlier this month.
While European capitals have generally supported these initiatives as necessary safeguards for the single market, Beijing has criticised them as protectionist measures.
"We urge the EU to adhere to its commitment to the open market and the principle of fair competition, abide by WTO rules, and stop unwarrantedly suppressing and restricting Chinese companies on various pretexts," Wang Wenbin, the spokesperson of China's Foreign Ministry, said on Wednesday.
"We urge relevant parties to stop making groundless accusations and slandering China," Wenbin added, Euronews reported.