China Warns EU Draft Procurement Law May Restrict Chinese Firms

What changed

China’s Ministry of Commerce said on Sept. 17 that a European Commission draft Public Procurement Act includes “Europe first” provisions, security-related evaluation criteria and possible restrictions on non-compliant third-country companies.

China urged the EU to follow World Trade Organization rules, keep its market open and remove discriminatory clauses. The ministry said it would monitor the legislative process and assess the impact.

Why it matters

This is still a draft, not an active ban. But if the core provisions survive, Chinese companies could lose ground in EU public tenders even when their prices or technical offers are competitive. They may face more documentation, higher compliance costs or exclusion from sensitive contracts.

European procurement authorities would gain more control over who qualifies, but they would also have to screen security and origin-related factors alongside price and performance. European suppliers could gain access to more publicly funded work, while buyers face a narrower pool and potentially less competitive bidding.

My read is that the likeliest outcome is a narrower law with some exemptions, not a clean retreat. In that case, Chinese firms would probably scrutinize EU tenders more closely and redirect some effort toward private or non-EU markets, while ordinary procurement remains open outside sensitive areas. A broader final law could push the dispute toward reciprocal restrictions and make commercial planning on both sides less predictable.

The last time this happened

The EU’s earlier procurement confrontation with China began with an investigation announced on April 24, 2024, into Chinese restrictions affecting foreign medical-device suppliers. On June 19, 2025, the European Commission adopted its first International Procurement Instrument measure, excluding Chinese operators from covered EU medical-device tenders and limiting Chinese-origin devices to 50% of relevant contracts. The covered contracts were valued at at least €5 million.

That case used procurement access as leverage against perceived discrimination. The difference is important: the earlier action followed a completed investigation under an existing reciprocity instrument, while the current proposal is a broader draft law combining “Europe first” preferences with security criteria.

By September 2026, the Commission had begun reviewing that instrument’s scope, functioning and efficiency. The documented result was a formal countermeasure, not a demonstrated opening of China’s procurement market. That is the useful warning for the current dispute: procurement rules can create bargaining pressure without producing a negotiated concession.

What to watch next

The key test is the draft’s final coverage: sectors, contract thresholds, exemptions and the exact meaning of its security criteria. Watch for EU tender notices requiring new origin or security disclosures, reports that Chinese companies are withdrawing or facing extra compliance work, and any Chinese move toward reciprocal procurement restrictions.