Background on the EU and its Medical Device Market
The European Union (EU) is a political and economic union of 27 member states, primarily located in Europe. It operates through a system of supranational institutions and intergovernmental negotiated decisions by its member states. The EU’s medical device market is a significant sector, with an estimated value of €150 billion in 2023. Public procurement plays a crucial role, accounting for approximately 70% of the market share.
EU’s New Restrictions on Chinese Companies
In a move to ensure fair market access, the European Commission announced that Chinese companies will be barred from participating in EU public tenders for medical devices valued at €60 million or more annually. This decision stems from the conclusion that EU companies face unfair access in the Chinese market.
The Instrument of EU Public Procurement
This action is the first under the EU’s International Public Procurement Instrument, which took effect in 2022. The instrument aims to secure reciprocal market access for EU businesses.
Potential Impact on EU-China Relations
These new restrictions may escalate tensions with China, exacerbated by existing trade disputes. These include EU tariffs on Chinese electric vehicles, Chinese measures against EU brandy and brake imports, and China’s export restrictions on rare earths sought by the EU. These issues are expected to be addressed at an upcoming EU-China summit in July.
Scope and Implementation of the Ban
The EU Commission stated that Chinese companies will be excluded from public procurement deals exceeding €5 million. According to a EU representative, the medical technology market in the EU was valued at around €150 billion in 2023, with public procurement accounting for 70% of the market. Despite representing only 4% of procurement deals, these high-value contracts account for roughly 60% of the market’s total value.
Selected offers must ensure that no more than 50% of medical devices originate from China. If no alternative providers exist, the exclusion will not apply.
EU member states have endorsed this plan earlier in the month. The EU Commission has previously stated that it found “clear evidence” of China favoring domestic medical devices for hospitals and that its bidding conditions led to abnormally low offers unprofitable companies could not match.
The EU Commission has confirmed that the ban will cover medical equipment, including diagnostic imaging devices, artificial body parts, and medical apparel.
China’s Response
The Chinese Ministry of Commerce has previously labeled the EU’s proposed measures as “protectionist” and urged the EU to maintain fairness and transparency. China has not proposed any corrective measures, though the EU Commission remains open to negotiations.
