EU Counters "Buy China" Strategy in Medical Devices Sector via Retaliatory Measures
Unleashing the Hammer:
The European Union has tossed down the gauntlet against China, retaliating against its "Buy China" policy that harshly encroaches upon EU healthcare companies. This week, EU members agreed on punitive measures aimed at Chinese restrictions, as confirmed by diplomatic and EU sources to our site.
These measures, pioneers in International Procurement Instrument (IPI) usage, target Chinese barriers obstructing EU medical device manufacturers. The IPI, which started functioning in August 2022, ensures fair access for EU firms in procurement opportunities outside the bloc.
Ambassadors rubber-stamped the proposal midweek, and the blueprint is slated for publication in the EU's Official Journal soon. Oliver Bisazza, CEO of MedTech Europe, the EU's medical device manufacturers' association, expressed hope for constructive dialogue to iron out the impasse.
However, Bisazza is eager for the full details, which he believes will underline companies' persistent aim for collaborative EU-China relations. The sector plays a pivotal role in enhancing people's health and maintaining essential healthcare infrastructure, so both parties must consider this paramount importance.
The Long, Windy Road
China's public procurement market has been a thorny issue for EU businesses, despite being one of Europe's significant trading partners for medical devices, accounting for 11% of export destinations in 2022.
The European Commission's investigation delved into the heart of China's government procurement law, which keenly upholds the "Buy China" policy prioritizing domestic products. The probe uncovered a myriad of obstacles impeding EU manufacturers, including opaque approval systems, biased certification procedures, vague national interest clauses, and unrealistic pricing pressures.
A glaring example: the number of "approved" imported medical devices in Guangdong Province plummeted from 132 in 2019 to 46 in 2021, highlighting the narrowing of market access for EU firms.
Time for Bilateral Consequences
The China Chamber of Commerce to the EU voiced concern via Twitter, asserting that the IPI measures send a "troubling signal" for bilateral trade ties. In a subsequent statement, the Chamber argued that the targeted use of the IPI risks becoming a de facto trade barrier and urged the EU to reconsider the necessity and long-term impact of such actions.
These moves arrive at a sensitive juncture in EU-China relations, teetering on a tentative diplomatic reset. The two sides have been proactive in mending long-standing disputes in response to changing global dynamics, including the Trump-era trade war and broader US-China tensions.
With the upcoming EU-China Summit slated for Beijing in the second half of July 2025, much is riding on both sides' efforts to navigate disputes and secure progress.
Despite the intensifying procurement sparring, a Commission spokesperson downplayed concerns, insisting that the IPI measures will not jeopardize broader trade relations. "We've consistently emphasized to any global partners with whom we perceive a problem regarding the level playing field for procurement: should those problems not be removed, we will be compelled to act," said the spokesperson.
On Wednesday, EU Trade Commissioner Maroš Šefčovič met with Chinese Minister Wang Wentao on the sidelines of the OECD Ministerial Council, their third encounter overall and second in person. According to the Commission, the discourse encompassed an array of critical bilateral issues as both sides strive to forge progress prior to the July summit.
The escalating disputes over China's public procurement market, a significant issue for EU businesses, have led to the European Union employing the International Procurement Instrument (IPI) as retaliatory measures against Chinese restrictions on EU medical device manufacturers. On the contrary, the China Chamber of Commerce to the EU has expressed concern that these IPI measures could signal a troubling direction for bilateral trade ties and potentially become de facto trade barriers.
