The European Union has initiated an investigation into the procurement of medical devices from China, aiming to address concerns that Beijing’s policies unfairly favor local suppliers.
The investigation, first reported by Bloomberg last week, focuses on gathering information from companies and member states and is expected to conclude within nine months.
If the EU finds any distortions in the principle of reciprocity in procurement markets, it may restrict China’s access to the European bloc’s markets.
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Such a move carries the potential of escalating tensions between the EU and China. Last year, the EU launched an investigation into combating subsidies in electric vehicles manufactured in China, which could result in imposing new tariffs by July.
The current investigation comes against the backdrop of concerns about Beijing’s exploitation of massive popular support for vital sectors, and the broader European economic security strategy that seeks to tighten export controls and scrutinize investments.
The investigation marks an initial step in what is known as the EU’s International Procurement Instrument, a law enacted in 2022 aimed at enhancing reciprocity in accessing public procurement markets.
If dialogues with Beijing lead to tangible corrective measures, the investigation may be suspended at any time.
Chinese leaders have dismissed European and American criticisms, denying that Beijing has tilted the Chinese market in favor of its companies.
Li Keqiang, China’s State Councilor, who met with German Chancellor Olaf Scholz last week, stated that industrial support is a common practice in the world, and many countries provide much more support than China, according to his remarks quoted by the German government.
In addition to investigating electric vehicles, the EU is also examining whether China provided illegal support to wind farms on the continent, as well as opening investigations into financial support for solar energy and railway companies.
The EU’s approach aligns with some Western allies who are taking a tougher stance against Beijing. US Treasury Secretary Janet Yellen traveled to China earlier this month, stating that the massive output of its factories has become a global problem.
She told CNN earlier this month that the United States would not rule out anything on the table, including the possibility of imposing additional tariffs to stem the flow of Chinese goods.
