**China Responds to EU Medical Device Restrictions Amid Tensions**
China has retaliated against the European Union’s restrictions on its medical device manufacturers while maintaining certain key exceptions, adding complexity to the relationship ahead of a crucial summit later this month. Beijing announced that it would exclude EU-based companies from government procurement for specific medical devices, although products manufactured in China will still be permitted.
This decision provides some relief for major European firms like Siemens Healthineers AG and Royal Philips NV, which have increasingly localized their production in China. Henry Gao, a professor at Singapore Management University, described the Chinese action as a “tit-for-tat move,” indicating it is a limited response to the EU’s previous restrictions on Chinese medical devices in public procurement.
Following the announcement, shares of Siemens Healthineers dropped by as much as 2.4%, while Philips saw a decline of up to 1.5%. Analysts from Jefferies, including Julien Dormois, noted that these companies are “minimally affected” due to their strong local presence in China.
These trade developments come just days before a meeting between EU and Chinese leaders in Beijing, where contentious issues are expected to be discussed, including the EU’s tariffs on a surge of Chinese electric vehicles and China’s support for Russia since the invasion of Ukraine. In response to the EU’s tariffs, China has initiated an anti-dumping investigation into certain European liquors and recently imposed duties on European brandy for five years, although it exempted major cognac producers that agree to maintain their prices above minimum thresholds.
The exemptions raise questions about whether these restrictions serve as a symbolic warning or represent a significant escalation in trade tensions. Zhou Mi, a senior researcher at the Chinese Academy for International Trade, referred to the medical device restrictions as a “reciprocal response” aimed at encouraging the EU to create a fair environment for Chinese companies.
Chinese leader Xi Jinping has been working to mend relations with the EU, especially as former U.S. President Donald Trump has strained ties over various issues. However, tensions have escalated recently, particularly regarding China’s control over rare earth materials, which has impacted European businesses.
In a sign of the growing strain in relations, reports indicate that the Chinese government plans to shorten the upcoming two-day summit with EU leaders to just one day. Additionally, Brussels is reportedly hesitant to sign a joint declaration on climate action with China during the meeting.
Cui Hongjian, a former Chinese diplomat and current academic at Beijing Foreign Studies University, stated that China is adopting a defensive stance, signaling a willingness to cooperate if Europe de-escalates tensions but also readiness to respond if conflicts arise. “China is prepared for any kind of summit,” he remarked.
**FAQ**
*What are the implications of China’s restrictions on EU medical devices?*
China’s restrictions on EU medical devices could lead to increased tensions in trade relations, impacting European companies operating in China while also signaling a potential for reciprocal actions in the future.
