本文来自微信公众号： 金杜研究 ，作者：MarkSchaubLiamLu，原文标题：《China in a Changing World Series | China Is No Longer Just a Market: How European MedTech Companies are Reassessing》
Many European medtech firms have footholds in China since the late 1990s.This foothold may be through a representative office,a wholly foreign-owned enterprise(WFOE),a joint venture or just relationships with distributors or suppliers.Relatively few committed to a deep and meaningful engagement with China.For most Europeans,China was always the market of tomorrow.Good as a note in the annual report to show global coverage but nothing to lose sleep over.
Something has happened in recent years to trigger European boards many of whom are considering China anew and asking questions like:
How do we handle China?
Do we need to double down in China or pull back?
What is our global reliance on China as part of our supply chain?
How important is China as a market?How important will it be in 10 years?
How are Chinese competitors developing?How far ahead are we?
Is the China strategy we had 20 years ago still working in 2026?
This renewed interest in China is due to a mix of geopolitical friction,Chinese developments in innovation and increased(yes not decreased)reliance on Chinese suppliers.The intensity of interest is because China is no longer just considered as a vast but difficult market and manufacturing base but because many Boards are worried if they are not engaged and learning from China in real time they may be left behind…not only in China but globally.
China's role in the global medtech ecosystem has changed fundamentally–and the pace of change is accelerating.
Today China is,simultaneously,a major growth market(with localisation pressure);an unprecedented source of both competitors and competitive pricing pressure;an integral part of the supply chain;and home to a sophisticated tech and engineering ecosystem.
The biggest single question medtech companies are asking is:
If I cannot compete in China–will we remain competitive anywhere else?
01
China the Market That Cannot Be Ignored
China is the world's second largest medical device market which is still growing at close to 6%annually.It is ageing rapidly,healthcare spending continues to rise and demand for sophisticated products remains real.
The problem for European medtech companies is that the most lucrative product categories are the same ones China is targeting for localisation.The European companies looking at China are not facing a choice between an attractive market and a hostile one–they are simultaneously facing both.
Some European medtech companies comfort themselves with being highly specialised or operating in a niche.In China,this will not protect you–once a niche becomes commercially attractive then domestic competitors pile in,close technology gaps and compress margins as aggressive competition plays out.
Another mistake is for the European think they are so far ahead in a specific technology that the Chinese competitors cannot catch up.European companies often underestimate the speed with which this can happen.
For most European medtech companies,ignoring China is not a serious option.
Most are now considering what kind of China strategy suits them in 2026.How to capture the opportunities that are available,how to compete effectively inside China,and how to use what they learn in China to strengthen their global business.
02
A Big…But Difficult Market
China is a difficult market.
The expansion of the Volume-Based Procurement(VBP)scheme has made things more challenging still for European exporters.Originally piloted for pharmaceuticals,VBP has been extended to medical devices since 2019 and has materially changed the commercial landscape.
The mechanics of VBP are simple.Government hospitals tender large volumes of medical devices,and price is often the decisive factor.VBP has led to significant price reductions across high-value consumables,and the National Healthcare Security Administration has continued to expand the categories subject to procurement.
European companies operating on a purely export led model for China have seen serious hits to their revenue and profitability.Products manufactured outside China will often have cost disadvantages that make it difficult to compete in VBP tenders.Even then simply cutting prices is rarely a winning solution.
European companies which can manufacture locally in China are better positioned to participate in VBP and withstand the resulting price pressure but it is not always a complete solution.
03
China’s Localisation Imperative
The procurement pressures described above are not occurring in isolation.They form part of a broader policy objective,the localisation of China's medical technology supply chain.
The 14th Five-Year Plan for the Medical Equipment Industry Development encourages the development and procurement of domestic medical technology.Its policy orientation has continued into the 15th Five-Year Plan period starting in 2026.The preference for local products appears across a range of policy measures and procurement practices.
This has sparked the ire of the European Commission which has characterised aspects of China's procurement framework as discriminatory.The European Commission has responded through the first use of its International Procurement Instrument to which China promptly responded with its own procurement restrictions on European suppliers.
For European medtech companies,the practical implication is straightforward.Any company seeking meaningful participation in China will increasingly need to consider some form of localisation in China.
The available options range from contract manufacturing through a Marketing Authorisation Holder(MAH)structure,to WFOE manufacturing operations,to joint ventures,strategic partnerships or selective technology licensing arrangements.Each offers a different balance of control,investment,localisation and risk.
Historically,many European companies viewed Chinese partnerships with considerable caution.Some of that caution was justified.However,China has changed,Chinese companies have changed,and most of the successful recent partnerships are more strategically aligned than the traditional China JVs of the 1990s and 2000s.Rather than creating a single vehicle to pursue the entire China opportunity,European companies are increasingly using partnerships to address specific objectives or challenges in China such as procurement access,manufacturing capability,product development or distribution but not putting their complete business in one entity.
When considering how best to team up in China the most important questions are:
Who will control the China platform and ensures compliance?
What technology is contributed,what technology is licensed,what technology is created,and who owns it?
What happens when the relationship ends?
With the right partner and clear strategy(i.e.European medtech in the driver's seat)in practice in medtech governance and compliance are usually shorter conversations than in many other sectors.Intellectual property and exit planning usually require more attention in negotiations.
Many foreign executives continue to view China through the lens of IP risk.While that concern remains legitimate,China's IP protection environment is stronger than many still assume.In practice,the key issue is often not whether intellectual property can be protected,but how technology arrangements are structured,ring-fenced,licensed and dealt with in practice.
Planning for the end of the relationship can dampen the mood of negotiations but it is crucial.One of the most common mistakes in China partnerships is treating exits as a future problem to be solved.However,by the time the parties need an exit mechanism,their interests have usually diverged and relations have become acrimonious.Exit provisions should therefore be treated as a primary term and agreed at the outset,not left until commercial momentum makes them difficult to discuss.Also as we move to multi-layered relationships forethought is required to best plan for situations where one part of the relationship terminates but another continues.
The most successful structures recognise that markets,technologies,regulations and relationships are not static but evolve.The objective is not simply to create a partnership for today,but to build a framework capable of adapting as both the market and the parties change over time.
04
China as a Corporate Gym–Learning from a Competitive Ecosystem
An important shift in European top executives thinking about China is that it is no longer just a potential market or a place to manufacture.There is a growing realisation that China has built a competitive medtech ecosystem with increasingly global impact.What happens in China no longer stays in China.
The main driver of this change has been the rapid development of Chinese medtech companies.Shenzhen Mindray Bio-Medical Electronics,founded in 1991 and now manufacturing over 3,000 device types,distributes to more than 190 countries and has the stated ambition to become a global top ten medtech company by 2030.
Chinese medtech companies are also heavily investing in R&D,often at higher levels than their OECD peers[1].They are developing products quickly,improving quality and operating in a domestic market that provides scale,clinical data,intense competition and procurement certainty.
European companies continue to hold significant advantages in many product categories but it would be a mistake to ignore the pace at which Chinese medtech competitors are improving.
European companies which remain at arm's length from China are not merely forgoing a potential market opportunity but are also missing out on competitive intelligence.Companies operating inside China see what local competitors are developing,at what price points,and with what clinical performance claims.They can engage with clinicians,procurement committees,and regulatory bodies in ways that inform product development globally.Those operating from outside will increasingly find themselves surprised by Chinese companies who suddenly arrive as capable competitors in their home markets.
The automotive industry serves as a useful warning.Established Western manufacturers consistently underestimated the pace at which Chinese companies would evolve.China now leads globally in electric vehicles and batteries.BMW's CEO Oliver Zipse captured the logic bluntly:BMW must remain competitive in China in order to remain globally competitive[2].The way he sees it-China is like a gym for German industry–to stay fit you need to compete in China.Fail in China and you may fail everywhere.
This logic applies to medtech.Chinese medtech companies compete every day in one of the most demanding markets in the world and are forced to improve quality,lower cost,move quickly and respond to procurement pressure.The intense home market pricing pressure forces them to take those capabilities to global markets.
European companies that stay outside China lose more than sales.They lose the ability to see these developments as they are happening.
05
Benefitting from China's Engineering Ecosystem
Western interest in China's medtech engineering capability has often focused on IP risk and technology leakage.Those concerns are real and need to be managed carefully.
However,Western companies that focus exclusively on risks may miss opportunities that the same engineering capabilities bring with it.
China's engineering ecosystem offers several advantages:responsive manufacturing,fast iteration,deep supply chains,NMPA-accredited testing facilities,clinical trial infrastructure,regulatory expertise and a fast moving digital health environment.
Medtech executives often refer to "China speed".The difference in development pace between Chinese and European operations can be striking.One European medtech company operating in China described a Chinese partner completing full product development in less time than it took the company's European operations to execute a packaging change.
This is not an isolated observation—it reflects structural features of the Chinese manufacturing and development environment:faster iteration cycles,lower cost of experimentation,shorter distances between design,engineering and production,and a regulatory pathway that can generate local clinical data and NMPA registrations on a faster cycle than equivalent European processes allow.
Accordingly,some European executives are considering China not only as a market but as a way to boost the company's worldwide competitiveness.Used well,China can provide speed,engineering flexibility and pipeline acceleration.In this regard contract manufacturing through a well-structured MAH arrangement,selective co-development arrangements with Chinese partners under carefully negotiated IP frameworks,and the use of NMPA-approved testing facilities for global regulatory submissions can all form part of a larger cooperation without the need for a full greenfield commitment.
06
Inside China vs.Outside China
Rising geo-political tensions are also complicating life for European medtech companies seeking to sell into China.The EU-China IPI confrontation and China's retaliatory procurement measures illustrate that "inside China" and "outside China" are becoming commercially distinct positions in medtech,with different procurement access,different competitive exposures,and different regulatory landscapes.
The EU's investigation found that 87%of Chinese public tenders for medical devices contained explicit or indirect barriers to foreign firms,with outright bans on imported devices rising from 36%in 2022 to 53%by early 2024[3].These figures represent the public procurement segment—government hospitals operating under central and provincial government procurement rules and do not capture the private hospital sector,which remains more accessible to imported products.
However,the Chinese policy trend is clear.As VBP categories expand,domestic content requirements develop,and China based IP-registration becomes increasingly required,the share of the Chinese medtech market readily accessible from an export-only position will shrink.European medtech companies that do not have an "inside China" capability will find themselves progressively confined to an ever narrowing segment of the China market.
Not all European medtech companies are ready for deeper engagement with China.Concerns about market access,IP protection,partner risk,and geopolitical uncertainty are all legitimate.However,if a medtech company wishes to have meaningful access to the Chinese market then localisation will be very likely part of the strategy.
07
Taking Stock of Your Current China Set Up
One of the issues facing a European board re-assessing China in 2026 is:
What do we currently have in China?
Does it still make sense?
Is it fit for purpose?
Most European medtech companies with a meaningful presence in China have done so by way of establishing a WFOE—a wholly foreign-owned enterprise.The WFOE structure offers control,confidentiality,and the ability to operate without a local equity partner.After an initial wave of JVs in the early 1990s the WFOE was considered the safer option–which it very much was.
Indeed,for many medtech businesses,the WFOE remains the appropriate vehicle,and there are real advantages to the WFOE manufacturing model when it is backed by genuine commitment:full operational control,cleaner IP ownership,and the absence of the governance tensions that JV structures can generate.
A WFOE,by itself,will increasingly not solve the localisation problem.A WFOE that imports products from Europe and then sells in China is,from the perspective of Chinese procurement authorities and VBP committees,an importer—regardless of its legal form.Unless the WFOE has invested in local manufacturing,local R&D and local IP registration it will,in effect,be a distribution entity with high fixed costs.The Siemens Healthineers model—a wholly-owned Shenzhen operation with over 9,000 MRI systems produced and 80%+localisation[4]shows that a WFOE manufacturing path is viable,but that it requires substantial and sustained commitment of the kind that most mid-sized European companies cannot replicate by themselves.
For companies not in a position to invest at that level,selective partnership structures deserve serious consideration.A hybrid approach—retaining the WFOE as a permanent China platform and anchor,while selectively using JV or strategic partnership structures in specific product lines or business areas—can provide localisation,distribution depth and manufacturing flexibility without requiring a company to commit its entire China position to a single counterparty.
Many existing WFOE were set up in the early 2000s and when reassessing them it is unlikely that they are presently the right scale or in the right location or configured for exactly the right purpose.However,European executives should look beyond the balance sheet when assessing the value of their existing WFOE.In many cases the WFOE provides a direct base in China,an on-the-ground team that understands your company’s business and products,and a platform through which Chinese partners,regulators,distributors and customers can be managed on a daily basis.
In this model,the WFOE is not merely a sales office or manufacturing site.It becomes the company's permanent China anchor,a vehicle through which regulatory registrations are held,government relationships maintained,commercial intelligence gathered,and strategic optionality is preserved regardless of how individual partnerships perform.
This matters because partnerships will not always succeed,and market conditions will change.A company that has subordinated its entire China presence to a JV structure has limited ability to reorient if that structure underperforms or the relationship deteriorates.A company that retains a direct platform alongside its partnerships retains the ability to adapt.
Conclusion
The China Strategy You Built in 2010 May Not Be the China Strategy You Need in 2026
For many European medtech companies,the question is no longer whether China matters.It does.The pressing question today is what their China strategy should be for the next decade.
Many European companies continue to approach China using structures and assumptions developed when it was a very different market with very different players.In the early 2010s,China was viewed as a sales opportunity,a manufacturing base and a source of cost advantage.In 2026 it has transformed to become much more.It is now also a source of competitors,competitive price pressure,engineering capability,product development and procurement challenges.
In the 2010s the questions were easier–JV or WFOE?Shanghai or Wuxi?
Today the questions are more complex and more specific for each company.Some medtech companies will conclude that they need deeper localisation.Others may pursue selective partnerships,contract manufacturing or co-development arrangements.Some may determine that their current level of investment and interaction remains appropriate.Regardless of product category or current stage of the company's China journey the common questions to be posed are:
What role does China play in our global business?
What capabilities do we need inside China?
What capabilities should remain outside China?
Do we have the right structure,the right partners and the right people on the ground?
And perhaps most importantly:is our China strategy right for the global market that exists today,or was it for the China market that existed twenty years ago?
Boards which consider these questions are unlikely to simply double down or to fully pull back.More likely,they take a clear-eyed view of what China has become in 2026,reassess the structures they already have,and build a strategy that reflects both the opportunities,challenges and realities of the modern Chinese medtech market.
China is no longer simply a market.Increasingly,it is an important part of a competitive landscape that will determine which medtech companies succeed globally over the next decade.
脚注：
[1]China's med-tech industry corners a big global market pie while India still explores.Fortune India.https://www.fortuneindia.com/business-news/chinas-med-tech-industry-corners-a-big-global-market-pie-while-india-still-explores/122470
[2]German carmakers need China to compete globally,BMW CEO says ahead of Merz trip.Reuters.https://uk.finance.yahoo.com/news/german-carmakers-china-compete-globally-110148927.html
[3]Reuters.(2025).EU backs curbs on Chinese medical device firms'bidding in public tenders.https://www.reuters.com/world/china/eu-backs-curbs-chinese-medical-device-firms-bidding-public-tenders-2025-06-02/
[4]Iversen,G.(2025).Siemens Healthineers to set up$137 million manufacturing facility in China.DOTmed.https://www.dotmed.com/news/story/64251