Medical Device Trade War Escalates Between China and EU

The simmering trade tensions between China and the European Union have boiled over into the medical device sector.

China’s Ministry of Finance announced Sunday it will restrict government purchases of EU-manufactured medical devices exceeding 45 million yuan ($6.3 million), a direct response to Brussels' recent curbs on Chinese firms participating in EU public tenders. This tit-for-tat escalation marks a significant development in the ongoing trade dispute, which already encompasses electric vehicles and spirits, and throws a wrench into the intricate machinery of the global medtech market.

The EU's initial move, invoking its International Procurement Instrument (IPI), blocked Chinese companies from bidding on EU public tenders for medical devices worth over €60 billion ($70 billion) annually. The European Commission justified this action by citing unfair market access in China, alleging that EU firms faced significant restrictions in competing for Chinese government contracts.

An investigation revealed that a staggering 87% of Chinese public procurement contracts for medical devices included provisions that discriminated against foreign suppliers. Brussels framed its IPI action as a necessary step to ensure reciprocal market access and level the playing field.

China, however, views the EU's actions as protectionist and discriminatory. The Ministry of Commerce expressed its disappointment, stating that despite China's efforts to show goodwill and sincerity, the EU had insisted on taking restrictive measures.

The ministry emphasized that China was left with no choice but to adopt reciprocal restrictions to protect its own interests. This rhetoric underscores the widening chasm between the two economic powerhouses and signals a potential for further escalation in the trade war.