Economic Observer Network reporter Zhang Ling According to a Bloomberg report on April 15, the European Union intends to launch an investigation into China's medical equipment procurement in order to allay concerns that the Chinese government favors local suppliers.

Bloomberg said that the survey will collect information from EU member states, and its main purpose is to engage in dialogue with China to ensure that the market is fair and open. In order to launch an investigation, the EU will for the first time invoke the International Procurement Tool (International Procurement Instrument, hereinafter referred to as "IPI").

The IPI was promulgated in June 2022. Its birth background is that the EU believes that the relationship with many non-EU countries in the field of government procurement is unbalanced, and the main problem is the lack of reciprocity in government procurement market access. The promulgation of the IPI is exactly what the EU wants to do to rebalance the situation and promote reciprocity.

However, in the nearly two years since its entry into force, the EU has not initiated an investigation under the IPI, and this investigation into the procurement of medical equipment in China will be the first case to invoke the IPI.

After launching the IPI investigation, if the EU confirms its concerns in the field of medical devices, it can take measures to restrict Chinese enterprises, goods and services from participating in the EU's public bidding.

on April 16, a staff member of the securities department of China's leading medical device company Mindray Medical (300760.SZ) told the Economic Observer Network that relevant matters have been noted. The EU may indeed investigate some bidding, but the IPI investigation has restrictions. At present, the company's operations have not been affected by the relevant investigation, the company will continue to pay attention to the relevant progress.

The staff member explained that, from the point of view of the procurement of products and services, the IPI survey would only cover contracts with a single value of more than 5 million euros; from the point of view of the procurement of works and concessions, the survey would only cover contracts with a single value of more than 15 million euros. At present, Mindray Medical does not have a single order in the EU that meets the corresponding standards.

Judging from the public information and public responses, few Chinese medical device companies with overseas operations have contracts that meet the investigation standards. However, rumors that the EU will launch an investigation into the purchase of medical equipment in China still raise concerns in the market.

on April 16, the share prices of many medical device enterprises including mindray medical (300760.SZ), united shadow medical (688271.SH), xiangsheng medical (688358.SH), nanwei medical (688029.SH) and anjes (688581.SH) all fell to varying degrees.

In recent years, a number of Chinese medical device companies have accelerated to sea. Take Mindray Medical as an example, in 2019-2022, Mindray Medical's overseas revenue increased year by year, reaching 7 billion yuan, 9.9 billion yuan, 10 billion yuan and 11.7 billion yuan respectively. However, the European market revenue does not account for a high proportion of Mindray's total revenue, ranking behind North America, Asia Pacific and Latin America. In 2021 and 2022, Meirui Medical's revenue in the European market was 2.3 billion yuan and 2 billion yuan, respectively, accounting for 23% and 17% of the year's overseas revenue, respectively, accounting for 9% and 7% of the year's total revenue.

Similar to Mindray Medical, the European market revenue of other domestic medical device companies does not account for a high proportion of total revenue, and is generally below 10% after excluding the phased impact of the new crown epidemic on revenue.