China and EU deadlocked on medical devices, still talking on PHEV curbs: source

China and the European Union remain deadlocked on trade in medical devices, despite ongoing discussions in Beijing, a source revealed. Intensive consultations are reportedly underway regarding Brussels' plan to introduce import safeguards against Chinese plug-in hybrid electric vehicles (PHEVs). Vice-Minister of Commerce Ling Ji met with Ditte Juul Jorgensen, the European Commission's director general for trade and economic security, in preparation for a second round of talks.

The tension between China and Brussels stems from issues such as the public procurement of medical devices and the import of Chinese PHEVs. In June 2021, the EU barred Chinese medical device companies from bidding for public tenders exceeding €5 million (US$5.7 million) for five years, citing evidence of discrimination. Subsequently, China barred EU companies without operations in China from government medical device contracts valued over 45 million yuan (US$6.7 million).

Speculation in Germany suggested that the European Commission was preparing to impose anti-subsidy duties on PHEVs imported from China. However, the Ministry of Commerce in China labeled such measures as a violation of World Trade Organization rules. European officials, including French Trade Minister Nicolas Forissier, emphasized the necessity of standing firm and utilizing trade defense instruments when justified, such as anti-dumping actions.

Nonetheless, they stressed that this should not lead to a cyclical, destructive trade war. France's Trade Minister expressed openness to reaching a mutually beneficial deal with China while retaining the EU's right to protect its market in a shifting geopolitical landscape.