How European medical device companies can (continue to) thrive in China

Article by Fabian Knopf
Director of Client Services 
R&P Lawyers (CNBW member)
CNBW contact person Beijing/Tianjin


A new report, published on 21 January 2025 by the European Commission, has shed light on ongoing discrimination against EU medical device manufacturers in China's public procurement market. This investigation - the first conducted under the EU's International Procurement Instrument (IPI) - presents compelling evidence that China has been limiting access for EU producers to its government contracts in a manner described as unfair and discriminatory.

The report's findings will play a pivotal role in shaping the Commission's next steps to restore a level playing field in this critical sector. The EU remains committed to engaging with China through constructive dialogue to address and eliminate these discriminatory practices. However, in the absence of an acceptable resolution, the Commission may consider adopting IPI measures. These could include restricting or excluding Chinese bidders from participating in EU government contracts.

Key Findings
The report concludes that EU medical device manufacturers face multiple forms of direct and indirect discrimination across China. These practices severely limit market access and affect all categories of medical devices. This situation is particularly stark when contrasted with the EU's public procurement market, which is one of the largest and most accessible in the world.

While Chinese exports of medical devices to the EU have surged by over 100% between 2015 and 2023, EU manufacturers continue to encounter barriers in China, highlighting a significant imbalance in market openness.

Read the report here ...


Navigating the Challenges: Insights for European Manufacturers
Many European medical device manufacturers have long relied on established distribution networks to access the Chinese market. These distributors often have strong relationships with local customers, making them valuable partners for navigating China's complex procurement landscape.

For many manufacturers, establishing and running their own manufacturing operations in China is not a viable option. In our experience, many lack the human resources that are technically and culturally ready to spend time establishing and running such operations in China. Instead, a common model involves delegating manufacturing to the distributor. While this arrangement offers market access, it comes with significant limitations in operational control.

However, manufacturers adopting this model can exert control in two key ways:

1. Intellectual Property (IP) Management:
Ensuring robust control over the use of IP in China is essential. IP can serve as a critical lever for maintaining quality and brand integrity.
2. Supply of Key Components: By controlling the supply of proprietary components, manufacturers can safeguard the quality and competitiveness of their products. However, this strategy may need to adapt as China adjusts its procurement rules over time.

Although some companies choose to own shares in their Chinese manufacturing operations, it’s important to understand that shareholding alone does not provide effective operational control without a significant on-site presence. Success in this market often hinges on the strength of the product’s key components and the effective management of IP.

Opportunities in a Growing Market
Despite the challenges, the demand for medical devices in China continues to grow. Companies that recognize the importance of IP, maintain control over critical components, and understand the dynamics of the Chinese procurement market are well-positioned to thrive. By aligning their strategies with these realities, European manufacturers can continue to benefit from opportunities in this vital market.

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