On June 19, 2025, the European Commission adopted Regulation (EU) 2025/1197 (the “Regulation”), which introduced important measures aimed at restricting access by Chinese economic operators and medical devices originating in China to the public procurement market in European Union healthcare and medical sector.
This decision follows the investigation launched by the Commission, known as “COM(2025)5,” which concluded on January 14, 2025, into practices adopted by China as part of its “Buy China” policy plan aimed at achieving substantial technological self-sufficiency in Chinese hospitals by 2030.
The European Commission found that the preference mechanism for the purchase of domestic medical devices introduced in China resulted in European companies being awarded only 13% of more than 380,000 Chinese public tenders between 2017 and 2024.
On July 6, China decided to face the EU measure by introducing restrictions on European economic operators access to the Chinese medical device market.
Scope of the measure: sectors, thresholds, and exceptions.
The Regulation, implementing Article 6(6)(b) of Regulation (EU) 2022/1031 (the “IPI Regulation”), provides for the exclusion of tenders submitted by all economic operators originating in China in all public procurement procedures in the Union for the purchase of medical devices such as: medical equipment, medical materials, pharmaceutical products (in particular, medical devices falling under CPV codes 33100000-1 to 33199000-1 as defined in Regulation (EC) No. 2195/2002).
The Regulation applies to all EU public procurement procedures for medical devices exceeding the threshold of €5 million, which currently represents approximately 59% of the total market for medical devices in the EU.
There are some exceptions: if only Chinese operators are able to meet the tender requirements or if they are the only ones able to offer the necessary devices for imperative reasons of general interest, contracting authorities may not apply the automatic exclusion measure, thus ensuring continuity of supply in critical cases.
Exclusion of Chinese companies from public tender procedures: a general rule?
It should be noted that the decision to exclude Chinese companies from public tenders is not a general rule, but refers exclusively to the medical device market, in relation to which the European Commission has identified a highly restrictive approach by China, aimed at favouring domestic companies.
However, this solution does not affect the possibility for Chinese companies to participate in public tenders launched by contracting authorities in Italy that do not fall within the scope of the Regulation. In fact, in line with recent case law on the subject, access by such foreign companies to the EU public procurement market is now generally admitted (see Regional Administrative tribunal of Campania, Naples, Section I, June 23, 2025, No. 4695).
What happens to European companies?
The new measures introduced by the Regulation do not only affect Chinese companies.
In fact, are excluded from tenders all operators, including EU operators, who use Chinese medical devices, provided that the value of the Chinese medical devices exceeds 50% of the contract value.
To determine the country of the competing operator in the tender or the manufacturer of the devices offered, the criteria set out in Article 3 of Regulation (EU) 2022/1031 and Article 60 of Regulation (EU) No. 952/2013 of the European Parliament and of the Council shall be taken into account:
In particular,
- to identify the origin of the product:
· if the product is wholly obtained in a single country or territory, it shall be originated in that country or territory;
· if the device is produced in two or more countries, it shall be considered to originate in the country or territory where it underwent its last substantial and economically justified processing or working;
- to identify the origin of an economic operator:
· for natural persons, reference shall be made to the country in which the person has citizenship or in which that person enjoys the right of permanent residence;
· for legal persons,
i. reference shall be made to the country under whose legislation the legal person is incorporated or otherwise organized and in whose territory the legal person carries out a substantial part of its business activities; or
ii. if the legal person does not carry out substantial business activities in the territory of the country in which it is incorporated or otherwise organized, the origin of the legal person is the origin of the person or persons who can exercise, directly or indirectly, a dominant influence over the legal person by virtue of ownership, financial participation, or the rules governing that legal person.
It should be noted that, where the operator subject to the measure is part of a group of natural or legal persons, the measure shall also apply to tenders submitted by that group (unless the participation of those persons or entities in the group is less than 15% of the value of the tender submitted by the group in question).
Next steps
The Regulation entered into force on June 30, 2025: from this date, all new public procurement procedures falling within its scope must comply with the new rules.
Therefore, the new measures introduced by the Regulation will not apply to tenders already in progress, but only to those published after the date of its entry into force.
Contracting authorities will be required to determine the origin of devices and economic operators in accordance with the criteria laid down in the Regulation and to calculate the value of contracts in accordance with the European public procurement directives.
By August 30, 2025, and at least every two years after the IPI Regulation is approved, the Commission will submit a report to the European Parliament and the Council on the application of the IPI Regulation and the progress made in international negotiations.
China's response
Beijing’s response to the EU’s position was “symmetrical”: on July 6, 2025, less than a month later, European companies supplying public health contracts worth more than $6.3 million (45 million yuan) were excluded from Chinese public tenders, and a 50% limit on EU components was imposed on bids from non-European suppliers.
The measure adopted by the Commission is an important step towards protecting fair competition and reciprocity in international public procurement markets.
The objective is twofold: on the one hand, to encourage China to remove obstacles avoiding the access to Chinese market; on the other, to strengthen the position of the European medical device industry, to the benefit of the EU economy and employment.
However, data from MedTech Europe (the European trade association for the medical technology industry) seem to show that Beijing’s crackdown risks forcing major European medical technology multinationals to review their strategies for accessing the Asian market, which currently accounts for 11% of EU exports in the sector and 17% of its imports.
The Commission's decision has important implications for Chinese companies’ ability to access the public procurement market in this specific sector. In this sense, the use of IPI marks a turning point in the EU's approach to protecting European industry in strategic sectors of innovation and high technology.
This is not the first measure of this kind: in Italy, by means of the Prime Ministerial Decree of April 30, 2025, on “Regulation of contracts for IT goods and services used in a context related to the protection of strategic national interests and national security” (the “Decree”), the Government sought to define criteria, procedures, and requirements for public procurement procedures relating to the award of public contracts involving strategic technologies and critical digital infrastructure. In this regard, the Decree requires contracting authorities to award rewarding criteria to operators that use technologies developed in Italy, the European Union, NATO countries, and six countries considered reliable, namely Australia, South Korea, Japan, Israel, New Zealand, and Switzerland. China is therefore excluded.
The issue remains open in the medical device sector, which is now a strategic sector for the economy and innovation in Europe.
The measures come at a delicate moment in EU-China relations, with a summit scheduled for July 24 in Beijing, where procurement will certainly be debated among other issues.
