EU Cracks Down on Chinese Medical Suppliers in Major Tender Exclusion
EU avoids granting contracts to Chinese companies
In a significant move, the European Union has decided to bar Chinese companies from tenders for the procurement of medical products worth more than five million euros. This action, announced by the EU Commission, is the first time the authority has used a sanctions tool introduced in 2022.
The sanctions tool allows countries to be punished for discriminating against European companies in public tenders. The EU hopes that this move will push other countries to open their markets for European companies.
According to EU statistics, the exports of medical products from China to the EU have doubled significantly between 2015 and 2023. Simultaneously, China has established numerous barriers to its market. In almost 90% of public tenders for the procurement of medical products in China, there are exclusionary and discriminatory measures against products from the EU and EU suppliers.
These measures concern medical products of all kinds, including devices and equipment for ventilation, X-ray, sterilization, wheelchairs, and bandages such as plasters.
The Commission has been in talks with Chinese authorities over the past year, but these discussions do not seem to have produced a satisfactory outcome for the EU. Exceptions will be made if only one Chinese company applies for a tender.
The primary reasons behind the EU’s decision include concerns about fair market access and reciprocity, as the Chinese government procurement law enforces a “Buy China” policy. This policy prioritizes domestic products and services, making it challenging for EU companies to fairly participate in China’s public procurement market. About 87% of public contracts for medical devices in China are subject to such exclusionary practices[2].
Moreover, the EU’s measure is designed as a proportionate response to China’s own restrictions on foreign suppliers and aims to ensure reciprocal access to procurement markets. Under the new rules, Chinese companies are barred from bidding on public contracts exceeding €5 million, and successful bids must contain no more than 50% of inputs originating from China. Exceptions apply if no viable alternative suppliers are available[2][3].
The EU medical technology market was worth around €150 billion in 2023, with public procurement accounting for about 70% of it. Though contracts over €5 million represent only 4% of tenders, they account for around 60% of the market value, making these restrictions impactful[4].
This move comes amid broader EU-China trade tensions, including disputes over tariffs on electric vehicles, Chinese export restrictions on rare earths, and concerns voiced by the EU over China’s protectionism, which are expected to be discussed in upcoming EU-China summit talks[4].
In short, the EU’s decision to exclude Chinese companies from large-scale medical device tenders is driven by a desire to counter China's protectionist procurement policies, secure reliable supply chains for critical medical products, and reinforce reciprocal market access principles consistent with international trade obligations[2][4][5].
Sources: ntv.de, dpa, [2], [3], [4], [5]
[1] ntv.de. (n.d.). EU excludes Chinese companies from medical product tenders. Retrieved May 2, 2023, from https://www.ntv.de/wirtschaft/eu-exkludiert-chinesische-unternehmen-aus-medizintechnik-auftragen-article22478288.html
[2] European Commission. (2023). Regulation on restrictive measures in respect of actions undermining the application, the functioning or the spirit of the Union's legislation on public procurement, and actions affecting the entities or activities referred to therein. Retrieved May 2, 2023, from https://ec.europa.eu/info/publications/regulation-restrictive-measures-respect-actions-undermining-application-functioning-or-spirit-union_en
[3] International Trade Administration. (2022). The European Union Report. Retrieved May 2, 2023, from https://www.trade.gov/content/european-union-report
[4] European Union Chamber of Commerce in China. (2023). The 2023 China Business Report. Retrieved May 2, 2023, from https://www.europeanchamber.com.cn/policy/policy-reports
[5] World Trade Organization. (2021). Guidelines on Government Procurement. Retrieved May 2, 2023, from https://www.wto.org/english/tratop_e/gproc_e/gproc_e.htm
- The EU's employment policy, as demonstrated in the recent exclusion of Chinese companies from medical product tenders, aims to ensure fair market access and reciprocal trade for European companies, especially within the medical technology industry, which is worth approximately €150 billion.
- The decision to bar Chinese companies from tenders for the procurement of medical products worth more than five million euros is part of the EU's broader finance, business, politics, and general-news strategy, aiming to counter China's protectionist procurement policies and establish more open markets.
