China announces new restrictions on the participation of certain EU-origin medical devices in government procurement activities

According to its notice, the Ministry of Finance has introduced the following key provisions:

1. For government procurement projects involving designated medical devices (covering approximately 50 categories, including high-value equipment such as magnetic resonance imaging (MRI) machines, as well as low-unit-price items such as medical rubber products), where the total project budget exceeds RMB 45 million (approximately USD 6.3 million / EUR 5.3 million), the following restrictions shall apply:
2. Where imported products are deemed necessary and statutory procurement procedures have been fulfilled, EU enterprises (excluding EU-invested entities operating within China) must be excluded from participation.
3. For non-EU enterprises participating in such projects, the proportion of EU-origin medical devices supplied must not exceed 50% of the total contract value.
4. These restrictions do not apply to procurement projects where only EU-origin medical devices can satisfy the procurement requirements.
5. The notice is effective as of July 6, 2025. For procurement projects subject to these measures that had already published bid-winning or transaction result announcements prior to this date, the contracts may proceed as planned and are not subject to said restrictions. 

On the same day, a spokesperson from China’s Ministry of Commerce (MOFCOM) addressed the media, stating that these measures are a reciprocal response to recent actions taken by the European Commission. Specifically, the spokesperson noted:

“On June 20, 2025, the European Commission adopted measures restricting the participation of Chinese enterprises and products in its public procurement of medical devices, and has continued to impose barriers against Chinese companies in this field. […] As a result, China has no choice but to implement reciprocal countermeasures. These measures are intended to safeguard the legitimate rights and interests of Chinese enterprises and to uphold a fair and competitive market environment. Importantly, the measures apply only to medical devices imported from the EU and do not affect products manufactured in China by EU-invested enterprises.”²

HL observations

1. A reciprocal response to the European Commission’s procurement restrictions

The restriction measures introduced by the Chinese government targeting certain EU medical device companies and EU-origin products in the government procurement sector appear to be a direct response to the European Commission’s actions announced on June 20, 2025. Under the Commission’s decision, Chinese enterprises are prohibited from participating in public tenders for medical devices within the EU single market where the contract value exceeds EUR 5 million. Furthermore, successful bids must contain no more than 50% of components sourced from China.³ In response, China has implemented reciprocal restrictions that exclude EU enterprises, with the exception of EU-invested entities operating within China, from participating in certain high-value medical device procurement projects.

2. Measured scope of China’s countermeasures preserves market access for EU-invested entities

China’s countermeasures do not extend to EU-invested enterprises operating within China. EU companies participating in tenders through their Chinese subsidiaries remain eligible, provided that the proportion of EU-origin medical devices in their bids does not exceed 50% of the total contract value. This distinction is significant for EU medical device manufacturers with established operations in China, as it maintains a viable, albeit more limited, pathway to market access. From this perspective, the Ministry of Finance’s approach appears relatively restrained when compared to the broader scope of the EU’s restrictions. By exempting EU-invested entities in China, the policy leaves room for foreign medical device firms that are committed to long-term development in the Chinese market.

Furthermore, based on our observations, there are relatively few medical device procurement tenders in Chinese hospitals that exceed the RMB 45 million threshold. While the annex to the Ministry of Finance’s notice includes a wide range of medical device categories, many, such as surgical instruments and medical rubber products, are unlikely to reach this threshold in typical procurement scenarios. According to Chinese media reports, a China-based executive of a multinational medical device company commented: “Some of our products listed in the annex are affected, but the order values certainly do not reach RMB 45 million. We are still assessing the potential impact. […] For most medical equipment, it is rare for a single procurement package to reach tens of millions of RMB.”⁴

In contrast, ultra-high-end medical equipment, where the unit price of a single device may exceed RMB 45 million, is more directly impacted by the new restrictions. For example, publicly available information suggests that Siemens Healthineers’ photon-counting CT scanners, which are still primarily imported from Germany, are priced around the RMB 45 million mark and may fall within the scope of the new restrictions.

3. Rising trade tensions in the medical device sector

China’s latest procurement restrictions mark a further escalation in trade tensions between China and the EU, particularly within the medical device sector. The current dispute has been building over several months. In January 2025, the European Commission formally accused the Chinese government of discriminatory practices in its public procurement processes, alleging that 87% of medical device tenders in China included conditions that disadvantaged EU suppliers.⁵

According to media reports, the EU’s public procurement of medical devices totalled EUR 42 billion in 2024, with Chinese suppliers accounting for approximately EUR 13.1 billion – representing 31.2% of the total. Should Chinese suppliers be excluded from future tenders, the EU would likely need to rely more heavily on domestic manufacturers. However, the price differential between Chinese and European products is typically over 40%, and in some cases exceeds 60%, suggesting that procurement costs in Europe could rise significantly in the near term.⁶ China’s swift and targeted policy response underscores the urgency of renewed trade dialogue. Without constructive engagement, the risk of further escalation between the two major economies remains high.

Authored by Roy Zou, Stephanie Sun, and Xiaoxian Wan.