China Discriminates Against European Medical Device Suppliers in Procurement, EU Says

January 14, 2025 TruthUSA

The EU stands ready to take “decisive action to defend the level playing field” and “support fair competition,” trade chief of the 27-nation-bloc says.

A European Union investigation has confirmed that discrimination against European medical device suppliers exists in China’s public procurement market, the bloc’s executive arm announced on Jan. 14, weighing potential new restrictions amid escalating trade tensions with Beijing.

After a months-long investigation, the EU said it found “clear evidence” that China limited the access of EU medical devices producers to its government contracts “in an unfair and discriminatory way,” the European Commission, the 27-member bloc’s executive body, said in a statement.

The EU is currently evaluating its next steps. The Commission said it remains “committed to engaging China in a constructive dialogue aimed at addressing and eliminating the discriminatory measures.” However, should Beijing fail to provide a satisfactory solution, the Commission may implement countermeasures under the International Procurement Instrument (IPI). Such measures include adjusting the scores of bidders from China, making it harder for them to win contracts, or completely excluding them from bidding on public projects in the EU, according to the Commission.

Maros Sefcovic, the EU’s new trade chief, said the Commission stands ready to take “decisive action to defend the level playing field” and “support fair competition.”

“Openness needs to be reciprocal,” Sefcovic said.

As of the time of publication, China has yet to respond to the EU’s findings. China’s foreign ministry has said the initiation of this investigation is a signal of “protectionism.”

The announcement marks the conclusion of a probe initiated by the Commission last April, representing the first application of the IPI, a regulation adopted in 2022 designed to promote reciprocity in access to global public procurement markets.

‘Serious and Recurrent Impairment of Access’

In a separate report released on Jan. 14, the Commission outlined its investigators’ findings, revealing that the Chinese regime has implemented a multilayered system of legal measures and policies that favor domestic medical device manufacturers over foreign competitors.

An industrial program aimed at transforming China into a high-tech manufacturing hub by 2025 has pressured hospitals nationwide to procure from domestic producers, according to the report.

Known as “Made in China 2025,” this initiative identifies high-performance medical devices as one of the 10 core industries and sets specific goals for Chinese hospitals to procure domestically made high-end medical devices, aiming for 70 percent by 2025 and 95 percent by 2030.

The EU’s investigators found that the Chinese regime also established a procurement system that incentivizes companies to win tenders by offering prices that are often unsustainable for profit-driven foreign firms. Beijing’s state support for local medical manufacturers enables them to offer even lower bids, according to the report. In some cases, the Commission found that such state support leads to price cuts exceeding 90 percent, effectively pushing foreign companies out of the market.

“[T]he Commission has reached the conclusion that the measures and practices identified in the course of the investigation, put in place by the PRC with respect to the procurement of medical devices, exist and are applied across the entire territory of the PRC,” the Commission stated in the report, using the acronym of the regime’s official name, the People’s Republic of China.

“The PRC has not proposed any specific corrective action to remedy this serious and recurrent impairment of access.”

Trade Tensions

Brussels’ findings were released amid heightened trade tensions with Beijing, particularly following a series of tit-for-tat actions last year.

The EU opened investigations into Chinese wind turbines, solar panels, and several other products last year, aiming to determine whether these China-based companies unfairly benefit from state subsidies while operating within the EU’s single market. In one of the highest profile cases, the Commission slapped tariffs of up to 45 percent on electric vehicles shipped from China after its year-long investigation found the regime’s massive state subsidies gave automakers in the country a “substantial unfair competitive advantage.”

In retaliation, the Chinese regime imposed provisional measures targeting EU brandy imports and added pork and dairy to its own ongoing anti-subsidy review list, a move that could lead to tariffs.

On Jan. 14, the Chinese communist regime leader Xi Jinping told European Council President Antonio Costa that there were “no fundamental conflicts of interest or geopolitical contradictions” between the two sides.

“China has confidence in the EU and hopes that the EU can also become a reliable partner for China,” Xi told Costa, according to the readout released by Beijing’s foreign ministry.

As of the time of publication, the EU had not issued a readout of the conversation.

These trade disputes unfold as the Chinese regime grapples with an economic downturn at home while facing increasing pressure from its key trading partners, especially the United States.

The Biden administration tightened regulations on Jan. 13 to limit the export of advanced artificial intelligence (AI) technology to China and other foreign adversaries.

President-elect Donald Trump, who will be sworn in on Jan. 20, has threatened to impose extra tariffs on all Chinese imports.

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