Brussels imposes limitations on Chinese involvement in acquiring medical devices in procurement processes.
The European Commission has taken a significant step towards ensuring fair access for European companies in the global market, particularly in the Chinese market, by implementing a regulation that imposes an International Procurement Instrument (IPI) measure against Chinese companies in EU government purchases of medical devices exceeding €5 million.
The IPI is a tool designed to incentivize positive change and create leverage for fairer access. This decision comes in response to China's longstanding exclusion of EU-made medical devices from Chinese government contracts. Successful bids for these purchases will not be allowed to have more than 50% of inputs from China.
The measures aim to ensure the availability of necessary medical devices for the EU healthcare system and are consistent with the EU's international obligations, including under the WTO framework. The global public procurement market is worth over €11 trillion per year, presenting a significant business opportunity for European companies.
The Commission's first investigation under the IPI Regulation was launched on 24 April 2024, following the conclusions of the first investigation under the IPI. The decision follows the findings that 87% of public procurement contracts for medical devices in China were subject to exclusionary and discriminatory measures against EU-made medical devices and EU suppliers.
Despite repeated efforts, China has not offered specific commitments to address these discriminatory measures and practices identified. The Commission remains committed to dialogue with the Chinese authorities to address this discrimination. However, exceptions will be made where no alternative suppliers exist.
The EU's International Public Procurement Instrument (IPI) is a tool to address foreign barriers in public procurement markets. The measure is intended to incentivize China to cease its discrimination against EU firms and EU-made medical devices. It is worth noting that the EU has no binding procurement commitments vis-à-vis China.
The Commission states that this measure is proportionate to China's barriers in the medical device market. The IPI aims to ensure fair access for EU companies in foreign markets, specifically the Chinese market in this case. The decision is a response to the more than doubling of Chinese exports of medical devices to the EU between 2015 and 2023.
It is important to note that there are no publicly available sources indicating which specific Chinese government agencies have not yet been asked by the European Commission to end discriminatory measures and practices against EU manufacturers and EU medical devices in China. The IPI framework allows for the suspension or withdrawal of measures should China offer satisfactory solutions.
The European Commission has decided to exclude Chinese companies from EU government purchases of medical devices exceeding €5 million, marking a significant step towards ensuring fair competition in the global market. The Commission remains hopeful for a positive dialogue with the Chinese authorities to address this issue and promote fair trade practices.
