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EU launches probe into China’s medical device procurement practices

The European Commission has launched an investigation into China’s alleged practice of favoring domestic companies in tenders for medical devices. This move comes amid longstanding grievances from the European Union (EU) regarding discriminatory practices that hinder European companies from accessing China’s lucrative medical device market.

Brussels has long accused Beijing of employing distorting and discriminatory practices, including stringent certification processes, opaque approval systems, and demands for abnormally low prices, creating significant barriers for European manufacturers seeking to compete in China.

Reports suggest that the EU’s medical device industry has faced challenges due to China’s “Buy China” policy, which prioritizes domestically made products in public tenders. This policy shift has impacted leading exporters of medical appliances in Europe, including Germany, the Netherlands, and France, who produce a range of high-value medical devices.

The probe, announced by the Commission, will investigate feedback from member states and businesses, engaging in dialogue with Chinese representatives over a period of up to nine months, with a potential extension of five months.

“If the investigation confirms the existence of the suspected practices,” stated the Commission, “retaliatory measures on China could be considered to ensure fair competition.” These measures could include restrictions on Chinese companies’ participation in public procurement across the EU, a market valued at over 2 trillion euros.

The European medtech industry has voiced concerns over the challenges posed by China’s procurement policies. Medtech Europe, the trade association representing European medical technology industries, highlighted the importance of meaningful dialogue with China to address market access issues.

China remains a significant trading partner for medical equipment in Europe, accounting for 11 percent of the market’s export destinations in 2022, according to the trade association.

The probe marks the first application of the International Procurement Instrument (IPI), a legislative tool aimed at addressing unfair competition faced by the EU from countries like China.

China’s heavily centralized economy has drawn criticism from Western allies for employing various tools to favor domestic companies over foreign competitors. This has led to increased tensions and prompted collective efforts to protect against perceived economic threats.

In addition to the probe into medical devices, the Commission has conducted unannounced inspections at the offices of a Chinese company in Poland and the Netherlands under the Foreign Subsidies Regulation. These actions follow investigations into Chinese producers of wind turbines and solar panels suspected of benefiting from state subsidies.

Furthermore, the Commission is nearing completion of an inquiry into China-made electric vehicles, which could result in increased tariffs to counter the advantage gained from state subsidies.

While European capitals have generally supported these initiatives as necessary safeguards for the single market, Beijing has criticized them as protectionist measures.

“We urge the EU to adhere to its commitment to the open market and the principle of fair competition, abide by WTO rules, and stop unwarrantedly suppressing and restricting Chinese companies on various pretexts,” Wang Wenbin, the spokesperson of China’s Foreign Ministry, said on Wednesday.

“We urge relevant parties to stop making groundless accusations and slandering China,” Wenbin added, Euronews reported.

(Inputs from ANI)

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Last Updated: 19th May 2024