【Text by Guancha.cn Columnist Deng Boxun】

On July 10, the Ministry of Finance issued the "Notice on Taking Relevant Measures in Government Procurement Activities for Medical Devices Imported from the EU" (hereinafter referred to as the "Notice"). For government procurement projects for medical devices exceeding RMB 45 million, companies from the EU should be excluded. However, the Notice does not restrict medical devices produced by European companies in China.

The incident originated on June 20, when the European Commission issued a bewildering ban: "To correct the imbalance in Sino-EU medical device trade," starting from June 30, 2025, Chinese companies shall not participate in medical device procurement in the EU region with an amount of 5 million euros; the share of Chinese products in the winning medical device contracts shall not exceed 50%.

The confusion I have about the EU's recent ban lies in the fact that we are currently at a breakthrough point in the development of our pharmaceutical and medical device industries. The level of domestic production of advanced medicines and high-end medical devices is continuously improving, and the market share of domestic brands is steadily rising. Any country that introduces trade restrictions that could lead to equivalent countermeasures from China may find its products permanently excluded from the vast Chinese market.

Sino-European Medical Trade: East Rising, West Declining

In 2024, the scale of Sino-European medical device trade was 37.04 billion U.S. dollars. Among them, China's import volume was 28.04 billion U.S. dollars, a decrease of 6.09% year-on-year, continuing for three consecutive years since 2022; China's export was 9 billion U.S. dollars, an increase of 12%.

From the product structure, the growth rate of high-end equipment exported by China to the EU is significant. For example, the export volume of endoscopes increased by 294% over four years. High-end models such as 7.0T MRI and 640-slice CT have achieved large-scale installation in markets like Germany and France due to their performance comparable to international standards and prices 30% lower than "foreign brands". As a result, although the EU remains China's largest source of medical device imports, the squeezing effect of domestic substitution on high-end core equipment has become increasingly evident, leading to a continuous decline in the share of "foreign brands" in China's medical device market.

Taking CT and MRI machines as examples of high-end medical imaging equipment. In recent years, "foreign brands" have generally established and put into operation production bases in China. Among the "three giants" in medical imaging equipment, Siemens Healthcare has six R&D and production bases in China; GE Healthcare has set up CT and MRI factories in Beijing and Tianjin; Philips has localized 95% of its products. However, due to the rapid rise of domestic brands, GE Healthcare's revenue in China fell by 15%, Siemens' imaging business in China dropped by 4%, and Philips' sales experienced double-digit declines.

Explosion of Domestic Brands

Behind the decline in revenue and market share of "foreign brands", there is a rapid rise of domestic brands. In 2024, the domesticization rate of magnetic resonance imaging in China reached 35.1%, an increase of 2.6 percentage points compared to 2023. In the CT field, 320-row 640-slice CT has been widely deployed nationwide, and the proportion of domestically produced equipment in new installations in tertiary hospitals has significantly increased. PET-CT, which costs tens of thousands of yuan per examination, has already accounted for 30% of the market increment. Domestic equipment has reduced the cost of PET-CT examinations by about 25% through price advantages.

In other areas, domestic brands have also performed outstandingly. In 2024, the domesticization rate of surgical robotic arms for endoscopic surgery in China reached 44.4%, and it is expected that the market size will exceed 10 billion yuan in 2025. The domesticization rate of ultrasound equipment has reached 62%, an increase of 13.6% compared to 2020. Although the high-end market for ultrasound equipment is still dominated by imports, the "east rising, west declining" trend in the high-end market is very noticeable.

As of February 2025, the National Medical Products Administration has approved approximately 50 medical linear accelerators (radiotherapy equipment), of which 35 are domestic products, accounting for about 70% of the total. The 7mm ultrasonic surgical knife broke the monopoly of "foreign brands" and achieved an average discount of over 70% in the 16-province alliance centralized procurement led by Guangdong Province, with a 40% improvement in surgical efficiency. For large medical equipment such as proton knives and heavy ion knives, which cost tens of millions of yuan, there are now mature domestic alternatives. The price of domestic radiotherapy equipment is only 40%-70% of that of "foreign brands", greatly reducing the treatment costs borne by patients.

Recently, multiple provinces adjusted medical service prices, significantly reducing testing fees. This is mainly due to the popularization of domestic testing equipment and reagents (driven by the anti-corruption campaign), which has reduced the costs of related services in medical institutions.

In 2023, the proportion of domestic brands in the bid amounts and quantities of medical testing equipment exceeded 50% for nine types, including biochemical analyzers, gene sequencing analyzers, and blood cell analyzers. Among them, the domesticization rates of blood cell analyzers, urine analyzers, microbial identification and antibiotic sensitivity analyzers, and glucose meters exceeded 70%, with the domesticization rate of urine analyzers even exceeding 80%.

However, the domestic share of high-end medical testing equipment still has room for improvement. In 2023, the proportion of domestic mass spectrometers (which sound like equipment from a physics laboratory) in the bid amounts and quantities was less than 20%; the proportion of domestic PCR gene amplifiers (used for nucleic acid testing) in the bid amounts was 29.84%, and the quantity proportion was 39.65%, with a significant gap compared to imported products.

Accumulation Leads to Breakthrough

The rise of domestic brands in recent years has many factors of timing, location, and people. "Made in China 2025" and subsequent multiple industry development five-year plans stipulate the application ratio of domestic medical devices in public hospitals at all levels, providing protection for domestic brands in the market. Regulatory authorities have opened up fast approval schemes for emerging fields such as AI diagnosis and brain-computer interfaces. Domestic brands have advantages in production delivery cycles, maintenance response times, and daily usage costs.

Domestic brands are more in line with China's national conditions in product design. For example, imaging equipment can perform checks on multiple parts, making high-end equipment like CT no longer "elitist" in grassroots medical institutions; image processing adds a "TCM constitution identification" imaging analysis module to assist TCM doctors in judging the imaging characteristics of phlegm-dampness and qi deficiency constitutions; functions are connected to 5G, facilitating remote consultations. More importantly, as China's economy enters a stage of high-quality development, innovation and industrial support accumulate gradually, creating conditions for the development of various high-end technology fields.

According to statistics, domestic medical equipment relies on China's complete industrial chain and clinical feedback mechanism, with an iteration speed 1-2 years faster than imported equipment. For example, a domestic brand's CT equipment upgraded from 128 rows to 320 rows in just 2 years, while Siemens took 4 years for the same series upgrade; a domestic brand's ultrasonic surgical knife upgraded from 5mm to 7mm in 18 months, breaking the long-term monopoly of foreign brands on "large-bore" technology. Under the unique Chinese advantages, China's medical device innovation continues to surprise the world.

Take heart valve replacement surgery as an example. It used to require open-chest surgery, with the patient's heart stopping during the operation, requiring extracorporeal circulation and postoperative heart resuscitation, which were life-threatening stages. Patients with severe conditions often could not withstand the surgery and had to undergo conservative treatment. Now, a new type of domestic heart valve can be replaced through minimally invasive surgery, requiring only a small incision in the patient's femoral artery to complete the valve replacement surgery.

The title of the media report in the above picture, "Putting a 'Chinese Gate' in the Russian Heart," was a spontaneous expression of the Chinese doctor after the successful surgery. The doctor works at a hospital located in a city that is unremarkable on the Chinese map. During the period of Sino-Soviet amity, there were no Soviet experts sent to the hospital for assistance. Now, the doctor's powerful motherland allows him to go to guide the largest heart disease medical center in Russia.

Brain-computer interface technology refers to the direct connection between the brain of a human or animal and external devices, enabling information exchange between the brain and devices. It is commonly used to assist, enhance, or repair human sensory-motor functions or improve human-computer interaction capabilities. China is the first country in the world to include brain-computer interfaces in basic medical insurance. Technologies from science fiction have become reality in China, capable of treating Parkinson's disease, intractable epilepsy, and paraplegia.

Surgical robots in China have also experienced "from nothing to something," fully leveraging the technical advantages of China's robotics industry and the clinical applications and feedback advantages generated by China's vast population. They have pioneered advanced technologies such as five-arm robots and gasless abdominal robots (gas inflation, a technique used in minimally invasive surgery to expand the surgical space by inflating the body cavity, which carries certain risks).

China's domestic market is the largest unified market in the world. The vast demand generates massive personalized needs, and countless practical scenarios drive innovation iteration toward perfection. The numerous competitive products and applications developed in China's rapidly growing internet economy have already proven this, and it will inevitably be proven again in the field of medical devices and other areas. Globally leading Chinese medical devices will become a new "national brand."

Recently, multiple "national-level" projects have focused on the transformation of scientific research results in the fields of medicine and medical devices, pursuing the creation of original medical equipment with principle innovations like X-ray machines. For example, the establishment of comprehensive national medical centers across the country aims to build high-level diagnostic and treatment capabilities while focusing on the characteristics of each establishing entity to formulate innovative directions for original medical equipment in areas such as zero-magnetic medical, superconducting medical, and AI diagnostics.

Up to the time of writing this article, the only further measure taken by the EU in response to China's "Notice" issued on July 10, 2025, is to hint at canceling high-level EU officials' visits to China. Faced with escalating tensions, the EU's lack of tools for countermeasures exposes the blind and frivolous nature of its provocative actions. I am confused why Europe would choose to fight a wrong war with China at the wrong time? Do they think that the agents in the Chinese market are all influential people, and by making the agents suffer a bit, they will bring their own provisions, like the "out-of-hospital lobbying" groups in European countries, to exert some influence on China's major policies? If so, they don't understand China at all. Chinese people don't eat this kind of trick.

(Risk Warning: This article introduces the business results of numerous listed companies in recent years. However, considering that I have always ended up selling my medical stocks, "I think" does not equal "the A-share market thinks," which is akin to a meditation lamp in the stock market. This article does not constitute investment advice.)

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