China MOF Notice (Caiku [2025] No. 19) — restricts EU-imported medical devices in government procurement

Mechanism

Caiku [2025] No. 19 operates as a two-tier restriction on Chinese public-sector medical-device procurement:

1. Exclusion tier — for procurement budgets ≥ CNY 45 million, purchasers that genuinely need imported products must exclude bids from EU-headquartered enterprises. EU-invested enterprises manufacturing in China are explicitly carved out and remain eligible. 2. Content-cap tier — non-EU bidders (including domestic Chinese suppliers) that do win such contracts may not fill more than 50% of the contract value with medical devices imported from the EU.

Contracts for which a winning-bid announcement had already been published before 6 July 2025 may still be signed under the prior rules — a narrow transition carve-out rather than a blanket exemption.

The notice's timing and framing make the reciprocity logic explicit: it follows directly from the European Commission's 20 June 2025 decision to exclude Chinese medical-device manufacturers and EU-sourced Chinese-content devices from EU public tenders above EUR 5 million, using the EU's International Procurement Instrument (IPI) — the IPI's first-ever invocation. This is a distinct legal track from MOFCOM's parallel Foreign Subsidies Regulation TIB determination (2025-01-09-china-mofcom-tib-eu-fsr-final-determination); that determination targeted rail, solar, wind and security-equipment SOEs under the FSR, while this MOF notice is a direct tit-for-tat against the IPI medical-device exclusion.

Downstream implications

• European medical-device majors with material China public-hospital exposure

(Siemens Healthineers, Philips, Fresenius) face direct procurement-access loss above the CNY 45m threshold unless they route bids through Chinese manufacturing subsidiaries.

• The EU-invested-enterprise carve-out creates a strong incentive for EU

medical-device makers to localise production in China rather than exit — the same "produce-in-China-to-sell-in-China" dynamic seen in other China market-access retaliation cases.

• Establishes a template MOF/MOFCOM could reuse against other IPI-covered

sectors if the EU broadens IPI designations beyond medical devices.

• Sets up a monitorable reciprocity cycle: watch for EU escalation (broadening

IPI scope or lowering its EUR 5m threshold) and a corresponding Chinese response (lowering the CNY 45m threshold or extending exclusion to additional sectors).

Open questions

• Will the EU treat this as proportionate reciprocity or escalate via the

Anti-Coercion Instrument or a new IPI designation round?

• Does China plan to extend the exclusion/content-cap model to other sectors

where the EU has active or prospective FSR/IPI investigations (rail, wind, solar, security equipment)?

• What share of China's public hospital procurement budget by value actually

falls above the CNY 45 million per-project threshold, i.e. how binding is the restriction in practice versus symbolic?