According to a report by Bloomberg on April 15, the European Union intends to launch an investigation into China's medical device procurement under the new tool "International Procurement Instrument" (International Procurement Instrument, or IPI), which may be announced as early as mid-April, which may lead to the EU restricting Chinese companies from participating in bidding in related fields in the EU.
According to the report, if the IPI investigation is initiated, the EU side will need to conclude it within nine months, and if the EU's concerns about the medical device sector are confirmed, the EU can take measures to restrict China's participation in public bidding. According to IPI regulations, these measures could mean that the Chinese side will adjust the score or exclude non-EU bidders altogether. There will also be a limit on the number of subcontracts that bidders can subcontract from enterprises subject to IPI measures, and the contracting agency may also decide not to implement certain IPI measures in exceptional circumstances if there are no other bidders.
According to the report, the EU's move means that this will be the EU's first use of a new tool, IPI. The IPI came into force in 2022 and the EU had intended to use the tool to promote so-called "reciprocity" in market access for public procurement. According to reports, the survey will gather information from companies and member states, and its initial purpose is to engage in dialogue with the Chinese government to ensure a fair and open market on both sides. According to the report, the EU launched a countervailing investigation into China's electric vehicles last year, and may announce preliminary anti-subsidy duty measures on electric vehicles made in China before July; in this context, if the EU launches an investigation under the IPI, it may increase tensions between the EU and China; the use of IPI is also related to the economic ** strategy being implemented in Europe, which aims to strengthen the EU's export controls and investment reviews.
According to the report, China's decision to push domestic hospitals to use more domestic equipment dates back to 2015. In the past two to three years, many provinces in China have taken further steps to improve the supply opportunities of Chinese enterprises to hospitals. These initiatives are part of the "Made in China" initiative, which aims to promote the development of domestic industries in key areas by 2025.
According to the report, in recent years, as local governments in China have put forward strict requirements for domestic products for many types of equipment, China has paid more and more attention to local procurement and state-oriented procurement of medical technology. The shift has turned China's trade deficit on these goods from 1.3 billion euros in 2019 to a surplus of 5.2 billion euros ($5.5 billion) a year later, according to data cited in a report released by the European Union earlier this month.
According to reports, the EU has been "dissatisfied" with China's procurement market, which was raised by European Commission Vice President and Trade Commissioner Dombrovskis during his visit to China last year. German Chancellor Olaf Scholz arrived in China on Sunday to "promote free trade and equal business opportunities," echoing U.S. Treasury Secretary Janet Yellen a week ago.
The report also cited data from European think tanks that China's medical technology market was worth 135 billion euros ($145 billion) in 2022. Major European manufacturers in this industry include Siemens and Philips. The EU believes that China is pushing ahead with the implementation of its "Made in China" policy and its goal of reaching 85% domestic market share for Chinese companies producing "core medical device components" by 2025. Of these, the target for high-end devices is 70%.
The report also cited a meeting with European Commission officials in Brussels on April 10 to make solemn representations on issues such as the EU's subsidy investigation into Chinese wind turbine suppliers and the re-release of a report on "serious distortions" in China's economy.