Trade tensions with Beijing are growing. The European Union (EU) opened an investigation this Wednesday, April 24, into Chinese public procurement of medical devices, suspecting “discriminatory” practices against its products.
Brussels suspects China of favoring local suppliers in this market, in particular via the “buy in China” policy, according to the notice of opening of the investigation published in the Official Journal (OJ) of the EU. If these discriminatory measures do not stop, the procedure will allow the EU to penalize Chinese companies in European tenders.
An EU deemed “protectionist” by Beijing
Beijing immediately accused Europe of “protectionism”. In recent years, the European Union has equipped itself with an unprecedented arsenal to fight against the discriminatory commercial practices of which it considers itself a victim, particularly in China.
Proclaiming the end of naïve Europe, Brussels has in recent months opened a series of procedures targeting Beijing in different areas: automobile, rail, solar panels and wind power.
The European Commission this time accuses the Asian giant of “promoting the acquisition of national medical devices and medical services”, of “restricting the purchase of imported goods” and of imposing centralized purchasing of medical devices in its procedures. conditions leading to abnormally low (price) offers that cannot be sustained by for-profit companies,” according to the notice published Wednesday.
These “restrictive import measures and practices put European Union companies at a significant and systemic disadvantage,” the Commission believes. The investigation must now establish the facts within nine months. Consultations are planned with the Chinese authorities so that they agree to open their market.
This is the first procedure opened under a new mechanism that the EU adopted in 2022 to obtain access to foreign public markets. If, at the end of the investigation, the EU fails to obtain reciprocity, it could significantly increase the offers of Chinese medical device companies in Europe, which would de facto prevent them from being competitive.
The possibility of a “total exclusion” of Chinese companies
The sanctions can even go as far as a “total exclusion” of Chinese companies from public procurement in the sector. The European Union estimates that its public tenders are 95% open to competition from the rest of the world, while European companies have almost no access to Chinese public markets.
“The EU has often used its trade toolbox and trade support measures, but these only send protectionist signals, target Chinese companies and damage the EU’s image,” protested Chinese diplomatic spokesperson Wang Wenbin on Wednesday.
In another regulatory framework, the EU launched an investigation in September into Chinese public subsidies for electric automobiles, threatening to increase customs duties on these products in order to defend European industry in the face of prices deemed “artificially low” .
In mid-February, the EU targeted a subsidiary of the Chinese railway manufacturer CRRC, the world number one in the sector, pushing the state group, accused of benefiting from subsidies, to withdraw from a call for tenders for the supply of electric trains in Bulgaria. On April 3, the Commission announced an investigation against two consortia including Chinese groups, candidates to design, build and operate a photovoltaic park in Romania.
A few days later, Brussels opened an investigation targeting wind turbine manufacturers subsidized by Beijing and suspected of distorting the market in Europe. MEPs also voted on Tuesday to ban products made from forced labor, a measure which could concern Chinese production involving the Uyghur Muslim minority.