Barring Chinese Firms: EU's Crusade for Fair Medical Product Procurement
EU Denies Contracts to Chinese Companies
Engage in a lively discussion about the EU's new policy that kicks Chinese companies out of EU tenders, particularly those dealing with medical products priced over €5 million. This policy change, announced by the EU Commission, is a pioneering use of a tool that became effective in 2022.
This tool, aimed at penalizing countries that snub European companies in public tenders, is expected to foster greater opportunities for European companies in global markets. According to EU data, the export of Chinese medical products to the EU has surged by nearly twofold between 2015 and 2023. Yet, China has put up remarkably tough barriers to its market, with 90% of tenders for medical products featuring discriminatory practices against European goods and suppliers.
Let's dive into the types of medical goods at stake, ranging from respirators, X-ray machines, sterilizers, wheelchairs, to bandages like plasters.
The EU has been voicing concerns and holding talks with Chinese officials since last year, but to no avail. The ban will have exceptions when only a single Chinese company submits bids for a tender.
The Nitty-Gritty Details
The European Union's decision is strategically motivated, primarily targeting China's unbalanced trade and procurement practices against EU companies. Key factors behind the EU's move include:
- Uneven Market Access: The EU medical device sector faces barriers such as opaque approval processes, discriminatory certifications, and exclusionary national interest clauses in China's market, restricting EU firms' participation in public procurement.
- China's "Buy China" Policy: China's procurement law stipulates that public institutions prioritize domestic products, disadvantaging foreign suppliers, including those from the EU.
- Protecting EU Healthcare Systems: The EU aims to ensure the availability of critical medical equipment within its healthcare system by limiting the influence of Chinese inputs in successful bids to a maximum of 50% and excluding Chinese companies from large contracts.
- Pressure for Change: After fruitless negotiations aimed at enhancing market access in China, the EU utilizes this exclusion as a pressure tactic to end discriminatory practices against EU medical device manufacturers.
- Compliance with International Trade Obligations: The EU asserts that the move adheres to WTO rules, as it holds no binding procurement commitments with China, and the measures are deemed proportionate and targeted.
- Market Expansion and Impact: The EU medical device market amounts to roughly 150 billion euros, with public procurement making up 70%. Contracts above €5 million account for a mere 4% in quantity but around 60% in value, enabling the ban to impact significant contracts.
In essence, the EU's exclusion of Chinese companies from major public procurement contracts in medical products is an aggressive move aimed at addressing China's discriminatory trade practices, promoting a level playing field, safeguarding EU healthcare supply chains, and urging China to welcome European firms into its public procurement market[1][2][3][4].
[1] ntv.de, dpa[2] World Trade Organization[3] Medical Device Industry Association[4] European Commission
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