EU bars Chinese firms from most medical device tenders

BRUSSELS (Reuters) -The European Union will bar Chinese companies from participating in EU public tenders for medical devices worth 60 billion euros or more ($68.9 billion) per year after concluding that EU companies are not given fair access in China.

The measure announced by the European Commission on Friday is the first under the EU's International Procurement Instrument, which entered into force in 2022 and is designed to ensure reciprocal market access.

The new restrictions are likely to increase tensions with Beijing inflamed by EU tariffs on China-built electric vehicles, Chinese measures against EU brandy and curbs on exports of rare earths that the EU wants resolved by an EU-China summit in July.

The Commission said on Friday that it would exclude Chinese companies from EU government purchases above five million euros.

An EU official said, guided by figures of Medtech Europe, the EU medical technology market was worth some 150 billion euros in 2023, with public procurement accounting for a 70% share. Contracts of over 5 million euros were only 4% of tenders, but made up some 60% by value, the official said.

Successful bids will have to ensure they include no more than 50% of medical devices from China. If there are no alternative suppliers, the exclusion will not apply.

EU members backed the plan earlier this month.

The Commission has previously said it found "clear evidence" that China favoured Chinese devices for hospitals and its tender conditions led to abnormally low bids that profit-oriented companies could not offer.

A Commission official said the ban would cover medical equipment including imaging equipment, artificial body parts and medical clothing.

China's commerce ministry has previously described the proposed EU measures as "protectionist", urging the EU to be fair and transparent and for both sides to resolve differences through cooperation and dialogue.

The Commission said China had not proposed any corrective action to remedy the situation, but an agreement was still possible.

($1 = 0.8708 euros)

(Reporting by Philip Blenkinsop; Editing by Benoit Van Overstraeten)