Policy | issued by the Ministry of finance, involving all foreign-funded enterprises of medical devices

Ministry of Finance:Government procurement should treat foreign-funded enterprises equally

Recently, the Ministry of Finance issued the notice on implementing the relevant policies on equal treatment of domestic and foreign-funded enterprises in government procurement activities (hereinafter referred to as the notice).

The notice specifies that government procurement shall treat products (including services provided by domestic and foreign-funded enterprises) produced in China equally according to law.

Budget units at all levels shall strictly implement The Procurement Law, The Foreign Investment Law and other relevant laws and regulations. In government procurement activities, except for procurement projects involving national security and secrets, they shall not treat the products produced by domestic and foreign-funded enterprises in China differently. For products produced in China, whether their suppliers are domestic or foreign-funded enterprises, their right to participate in government procurement activities on an equal footing shall be guaranteed according to law.

Budgetary units at all levels shall not, in their government procurement activities, exercise differential or discriminatory treatment to domestic or foreign-invested enterprises in government procurement information release, determination of suppliers’ qualification conditions, qualification examination and evaluation standards, etc. Suppliers shall not be restricted by forms of ownership, organizational form, equity structure, investor nationality, product brand or other unreasonable conditions to ensure fair competition between domestic and foreign enterprises.

In government procurement activities, domestic and foreign-funded enterprises may raise questions and complaints in accordance with relevant regulations if they believe that their rights and interests are damaged by procurement documents, procurement process, bid winning or transaction results.

Regarding the regulations and practices that violate the requirements of this notice, as well as the establishment of various alternative databases, directory databases, qualification databases and other regulations and practices related to products and suppliers in violation of regulations and practices, all localities shall promptly clean up and correct them.

Strict approval is not a restriction on imports

 For a long time, in order to increase the competitiveness of domestic equipment, the state and local governments have issued a series of policies to support domestic medical device enterprises.

For example, in June this year, the State Administration of Taxation issued a Notice on Revising and Promulgating the Measures for the Administration of Value-added Tax Rebate for the Purchase of Domestic Equipment by R & D Institutions.

 The announcement proposes that qualified R&D institutions (hereinafter referred to as R&D institutions) purchasing domestic equipment shall be refunded in full in accordance with these Measures (hereinafter referred to as tax refund for purchasing domestic equipment).

A few days ago, the Shaanxi Provincial Health Commission issued the “Administrative Measures for Government Procurement of Imported Products by Budget Units”, which will implement stricter approvals for the procurement of imported medical products. Each unit’s government procurement of imported products requires five stages of examination and approval, namely, unit declaration, expert demonstration, online publicity, departmental centralized demonstration, and financial approval and execution.

Guangdong, Zhejiang, Sichuan and other provinces have also issued relevant “lists of permitted purchases of imported products.” The “Outline of the “Healthy China 2030″ Plan” clearly proposes to strengthen the construction of high-end medical device innovation capabilities and promote the localization of medical devices.

Localization becomes a trend

 In fact, China has always been one of the most important markets for multinational enterprises in terms of market capacity and policy support.

Coupled with the impact of the epidemic, the current situation of stable control of the domestic epidemic has also become an important guarantee for the stable business performance of many multinational enterprises.

Under this circumstance, foreign-funded enterprises produce products in China, both in terms of R&D and marketing strategies, which are adjusted according to the needs of Chinese customers, and the promotion of localization has become the choice of many multinational companies.

On November 27, 2020, Medtronic Senior Vice President and President of Greater China Gu Yushao publicly stated that one of the four major strategies for Medtronic’s future development is to promote local manufacturing, localize the entire industry chain, and accelerate the combination of clinical and innovation.

In January 2019, the Axikang Suzhou factory built by Johnson & Johnson with an investment of US $180 million was completed, including endoscopic linear cutting stapler, open linear cutting stapler, surgical suture and other products.

Xiao Yindi, general manager of GE Healthcare (China) ultrasound business, said recently that GE’s ultrasound business is currently realizing a full domestic production of products ranging from economical to high-end products. In terms of supply chain, currently, GE Healthcare China has built a supply chain concentric circle with Wuxi factory as the center and a radius of 200 kilometers. Local suppliers can respond to supply within 3 hours.

What cannot be ignored is that the abundant domestic labor resources, raw material resources and land resources, coupled with some policy support, will greatly reduce the operating costs of multinational machinery enterprises under localization, which can also increase the competitive advantage of foreign-funded enterprises in the Chinese market. Under the comprehensive factors, multinational machinery enterprises will pay more attention to and promote the localization strategy.

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Article source: Saibailan Instruments