Against a backdrop of growing trade tensions with Beijing, the European Union (EU) opened, on Wednesday April 24, an investigation into Chinese public procurement of medical devices, presuming the existence of practices “discriminatory” against its products. Brussels suspects China of favoring local suppliers in this market, in particular through the “buy in China” policy, according to the notice of opening of the investigation published in Official Journal of the European Union.
If these discriminatory measures do not stop, the procedure will allow the EU to penalize Chinese companies in European tenders. Beijing immediately accused Europe of “protectionism”.
Proclaiming the end of naive Europe, the EU has in recent years equipped itself with an unprecedented arsenal to fight against the discriminatory commercial practices of which it considers itself a victim, particularly in China. In recent months, Brussels has opened a series of procedures targeting Beijing in different areas: automobiles, rail, solar panels and wind turbines.
Restricted access to the Chinese market
The investigation launched on Wednesday must establish the facts within nine months. This is the first procedure opened under a new mechanism that the EU adopted in 2022 to obtain access to foreign public markets.
The European Commission accuses the Asian giant of “promote the acquisition of medical devices and national medical services”of “restrict the purchase of imported goods” and to impose in its centralized purchasing procedures for medical devices “conditions leading to offers [de prix] abnormally low levels that cannot be supported by for-profit companies”, according to the notice published Wednesday. These “import restrictive measures and practices significantly and systemically disadvantage” European companies, believes the Commission.
Consultations are planned with the Chinese authorities so that they agree to open their market. 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. Sanctions can even go up to one “total exclusion” of Chinese companies in 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.
China denounces “protectionist signals”
“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 2023 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 judged prices. “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 also announced an investigation against two consortia including Chinese groups, candidates to design, build and operate a photovoltaic park in Romania. Before opening, a few days later, 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 Uighur Muslim minority.