In a significant move, the European Commission has launched a formal investigation into China’s practices in the procurement of medical devices. This comprehensive probe has been initiated with the aim of addressing longstanding concerns raised by EU businesses regarding discrimination against them in the Chinese market.
The preliminary investigation conducted by the Commission has uncovered serious and persistent barriers to access faced by EU economic operators, goods, and services seeking to participate in China’s public procurement market for medical devices. These barriers include stringent rules that differentiate between imported and domestic products, as well as the imposition of conditions in centralized procurement processes that result in abnormally low bids that are unsustainable for profit-oriented companies.
The investigation highlights China’s ‘buy China’ policy, the Made in China 2025 strategy, and regulations mandating local authorities to prioritize domestic products as factors contributing to the challenges faced by EU businesses. The preliminary findings also point to the existence of more stringent rules for the procurement of imported products compared to domestic ones.
In response to these concerns, the Commission has invited the Chinese government to submit its views and provide relevant information regarding the alleged measures and practices. The investigation is expected to be concluded within nine months. If the Commission confirms its preliminary findings, Chinese companies could face downgraded applications for tenders in the single market and potential exclusion from EU tenders.
This investigation marks the latest in a series of probes initiated by Brussels under various instruments, including the foreign subsidies regulation (FSR), which is designed to uncover market-distorting state handouts provided to overseas firms operating in the EU. Four investigations have been launched against Chinese firms under this tool, raising concerns among targeted businesses about the speed and scope of the investigations.
The EU’s escalating scrutiny of foreign subsidies and alleged anti-competitive practices reflects growing concerns about the potential impact on European businesses and the integrity of the single market. The outcome of the medical device procurement investigation will be closely watched by both EU businesses and the Chinese government, as it has the potential to shape future trade relations between the two parties.
