China Retaliates Against EU With Ban on Big Medical-Device Contracts

China’s Ministry of Finance said on 6 July it will bar European Union suppliers from taking part in Chinese government procurement of medical devices when the contract value exceeds 45 million yuan (about US$6.3 million). The measure, which takes effect immediately, also blocks purchases of equipment from other countries that contain more than 50 percent EU-made components; products manufactured in China by Europe-funded firms are exempt.

Beijing characterised the step as reciprocal retaliation for European Commission rules adopted on 20 June that exclude Chinese companies from EU public tenders for medical devices worth more than €5 million (US$5.8 million) and cap Chinese content in winning bids at 50 percent. Brussels invoked the International Procurement Instrument after an investigation found that almost 90 percent of Chinese tenders in the sector disadvantage European suppliers. The Commission puts the bloc’s medical-device procurement market at roughly €60 billion a year.

The tit-for-tat curbs deepen trade friction between the world’s second- and third-largest economies, already strained by EU tariffs on China-made electric vehicles and China’s duties on EU brandy. Both sides say they remain open to dialogue ahead of an EU-China leaders’ summit later in July, but neither has shown willingness to roll back the new procurement restrictions.