In a move that could reshape the global procurement landscape, the European Commission has formally excluded Chinese suppliers from public tenders for high-value medical devices, using the International Procurement Instrument (IPI) for the first time since its adoption in 2022.
The decision, made public on 20 June 2025, will bar Chinese firms from bidding on public contracts exceeding €5 million, a significant threshold that covers much of the EU’s hospital infrastructure, diagnostic equipment, and life-support systems procurement.
The Rationale: Reciprocity, or the Lack of It
At the heart of the Commission’s decision lies a growing frustration with China’s continued protectionism in public procurement. While EU suppliers have been allowed limited access to Chinese tenders, the barriers remain formidable: opaque licensing systems, preferential treatment for domestic providers, and highly restrictive technical requirements that effectively exclude foreign bidders.
The EU has long championed open, competitive procurement markets, its public procurement market is estimated at €2 trillion annually, one of the most transparent globally. But this openness, officials argue, has not been reciprocated.
Thus, invoking the IPI, created specifically to level the playing field, became not only justified but necessary.
The Numbers at Stake
The Commission estimates that the new restrictions affect contracts worth up to €60 billion per year across the bloc. The restrictions are not universal: they target only those sectors where European firms are most disadvantaged in Chinese markets.
Notably, the exclusion does not apply to Chinese suppliers based in EU member states or those fulfilling subcontracts below the €5 million threshold. Nor does it constitute a full trade ban, it is, rather, a calibrated restriction aimed at compelling negotiation.
Strategic Implications
The move is part of a broader European strategy to reduce strategic dependencies on non-EU suppliers in sectors deemed critical, healthcare, energy, semiconductors, and defence.
It also aligns with the EU’s evolving stance on “de-risking” from China, which includes investment screening, enhanced export controls, and the development of homegrown capabilities in sensitive technologies.
Procurement experts across the bloc have expressed both concern and support. On the one hand, the loss of low-cost competition may lead to short-term cost pressures. On the other, this could finally incentivise domestic and regional innovation, particularly among small and mid-sized medtech firms.
A New Procurement Era?
This precedent could signal a paradigm shift. While Europe has often hesitated to weaponise procurement, the increasing intersection of trade, security, and values has changed the calculus. The IPI, once a dormant instrument, is now a formidable lever of influence.
Whether China will soften its stance remains to be seen. What is clear, however, is that the EU is now ready to act with teeth when its open procurement model is exploited.
Sources:
Reuters – EU bars Chinese firms from most medical device tenders (20 June 2025)
