EU opens investigation into China’s medical device procurement

The European Union launched an investigation into China’s medical device procurement, as the bloc seeks to address concerns that Beijing’s policies unfairly favor domestic suppliers.

The probe, first reported by Bloomberg last week, will focus on information gathering from companies and member states and will need to be concluded within nine months. If the EU finds a lack of reciprocity in procurement markets then it could restrict Chinese access to the bloc’s tenders. 

Such a move risks raising the stakes in EU-China relations, after the bloc last year launched an anti-subsidy investigation into electric vehicles made in China that could see new tariffs introduced by July. The probe arrives on the back of skepticism about Beijing’s use of massive public support for critical sectors and a broader European economic security strategy that seeks to toughen export controls and investment screenings.

The probe constitutes an initial outing for the EU’s so-called International Procurement Instrument, a 2022 law that’s meant to promote reciprocity in access to public procurement markets. Should a dialog with Beijing lead to tangible corrective actions, the probe can be suspended at any time.

Chinese leaders have pushed back against European and US criticism that Beijing has skewed China’s market in favor of its companies.

Chinese Premier Li Qiang, who met with German Chancellor Olaf Scholz last week, said, “industrial subsidies are a common practice in the world, and many countries have much more subsidies than China,” according to a German government transcript of his remarks.

In addition to the EV investigation, the EU is also looking into whether China provided illegal support for windparks on the continent and it has brought subsidy probes into solar and railway firms.

The EU’s approach aligns with some Western allies, who are taking a firmer stance with Beijing. US Treasury Secretary Janet Yellen traveled to China earlier this month, saying that the vast output of its factories had become a global problem. 

The US won’t take “anything off the table,” including the possibility of additional tariffs, to stem the flood of Chinese goods, she told CNN earlier this month.