"Discrimination Against Domestic Products and EU Bid Participation Causes Disadvantages"
The European Union (EU) has launched an investigation into unfair trade practices in China's medical device sector.
On the 24th (local time), the European Commission announced that it has initiated a ex officio investigation into China's medical device sector under the EU International Procurement Instrument (IPI). The IPI is a tool designed to address discriminatory bidding practices that restrict European companies' access to public procurement markets in third countries. This is the first time an ex officio investigation has been triggered since the IPI regulation came into effect in August 2022.
The Commission stated, "China structurally favors domestic products in public procurement of medical devices or discriminates against EU bidders, causing serious disadvantages," explaining the reason for the investigation.
Due to China's 'domestic preference' practice, fair competition between Chinese companies and foreign companies such as those from the EU is impossible in public tenders. Furthermore, as European companies have been forced to adopt localization strategies to access the Chinese market, there is a serious concern about the outflow of European medical device technology, which boasts technological superiority, and jobs.
According to the IPI regulation, during the ex officio investigation period, negotiations will be held with the Chinese side to resolve discriminatory practices. The investigation period is nine months and can be extended up to one year and two months if necessary.
If negotiations fail, participation of Chinese companies in EU medical device public procurement projects may be restricted or they may face disadvantages in bidding.
Previously, the EU also launched ex officio investigations targeting key Chinese clean technology sectors or specific companies where sanctions are possible. The Commission is currently conducting an 'anti-subsidy investigation' that could impose countervailing duties on all electric vehicles imported from China to the EU, and an 'anti-circumvention regulation' investigation to exclude certain Chinese solar panel and wind turbine companies from participating in EU member states' public procurement.
The EU has consistently expressed dissatisfaction with China's overproduction in manufacturing and the expansion of low-priced exports. Last week, German Chancellor Olaf Scholz warned during his visit to China that if China does not heed concerns about unfair competition, dumping, and overproduction, Europe will impose more trade defense measures.
Meanwhile, China maintains that these measures are part of protectionist policies aimed at safeguarding less competitive EU companies. As President Xi Jinping is scheduled to visit EU member countries such as France and Hungary early next month, these issues are expected to be raised during the respective summits.
Wang Wenbin, spokesperson for the Chinese Ministry of Foreign Affairs, said at a regular briefing on the same day in response to questions about the EU's investigation into the medical device procurement market and raids on Chinese security companies, "The recent activation of economic and trade toolkits and trade remedy measures by the EU is a signal of protectionism," adding, "The target is Chinese companies, and the damage is to the EU's own image."
He continued, "The EU consistently claims to have the most open market in the world, but from the outside, it appears Europe is gradually moving toward protectionism," and said, "We urge the EU to honor its commitments to market openness, principles of fair competition, and World Trade Organization (WTO) rules, and to stop suppressing and restricting Chinese companies under various pretexts."
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