China retaliates to EU ban with import restrictions on medical devices

Hong Kong: China's Finance Ministry said on Sunday it was restricting government purchases of medical devices from the European Union that exceed 45 million yuan ($6.3 million) in value, in retaliation to Brussels' own curbs last month.

Tensions between Beijing and Brussels have been rising, with the European Union imposing tariffs on China-built electric vehicles and Beijing slapping duties on imported brandy from the bloc.

The European Union said last month it was barring Chinese companies from participating in EU public tenders for medical devices worth 60 billion euros ($70 billion) or more per year after concluding that EU firms were not given fair access in China.

The measure announced by the European Commission was the first under the EU's International Procurement Instrument, which entered into force in 2022 and is designed to ensure reciprocal market access.

China's countermeasures were expected after its commerce ministry flagged "necessary steps" against the EU move late last month.

"Regrettably, despite China's goodwill and sincerity, the EU has insisted on going its own way, taking restrictive measures and building new protectionist barriers," the commerce ministry said in a separate statement on Sunday.

"Therefore, China has no choice but to adopt reciprocal restrictive measures."

The EU delegation office in Beijing did not immediately respond to a request for comment.

China will also restrict imports of medical devices from other countries that contain EU-made components worth more than 50% of the contract value, the finance ministry said. The measures come into force on Sunday.

The commerce ministry said products from European companies in China were not affected.

The world's second- and third-largest economies are due to hold a leaders' summit in China later in July.

On Friday, China also announced duties of up to 34.9% for five years on brandy originating in the European Union, most of it cognac from France, after concluding an investigation largely believed to be a response to Europe's EV tariffs.

Major cognac producers Pernod Ricard, LVMH and Remy Cointreau were spared from the levies, however, provided they sell at a minimum price, which China has not disclosed.

($1 = 7.1645 Chinese yuan renminbi)