China has barred European companies from major Chinese government medical device contracts, hitting back against similar EU restrictions imposed on Chinese firms last month. In a notice on Sunday, the Ministry of Finance said that European Union companies without operations in China were excluded from government medical device contracts valued at more than 45 million yuan (US$6.3 million). Taking effect on Sunday, the restriction does not apply to EU-funded companies operating in China. Non-EU companies taking part in such government tenders must not allocate more than half of the total contract value to importing medical devices from the EU, according to the finance ministry. The Ministry of Commerce said the move was a last resort, after Beijing had “repeatedly expressed through bilateral dialogues its willingness to resolve the differences through consultation and arrangements on government procurement”. “Despite China’s goodwill and sincerity, the EU has persisted in taking restrictive measures and building new protectionist barriers,” it said. “As a result, China has no choice but to adopt reciprocal countermeasures.” “These actions aim to safeguard the legitimate rights and interests of Chinese enterprises and uphold a fair competitive environment,” it added. In June, the European Union barred Chinese medical device companies from bidding for public tenders worth more than €5 million (US$5.89 million) for five years. It followed a European Commission investigation, which concluded in January that there was “clear evidence of China limiting access by EU medical device producers to its government contracts in an unfair and discriminatory way”. China and the EU are scheduled to hold a summit this month in Beijing, marking the 50th anniversary of diplomatic relations. In preparation for the meeting, both sides have been addressing trade disputes, ranging from electric vehicles (EV) to cognac. The “technical” part of negotiations towards resolving the EV dispute had been finalised, with only the final step remaining, Yuyuan Tantian, a social media account affiliated with state broadcaster CCTV, reported on Friday, saying the deal now hinged on “political will” from the European side. But tensions have emerged between the world’s two biggest exporters in recent months. Apart from frictions surrounding medical device procurement, on Friday, China decided to impose anti-dumping tariffs on European brandy, which is mostly produced in France. Starting on Saturday, these tariffs will last for five years and will be up to 34.9 per cent. In mid-June, European Commission President Ursula von der Leyen accused China of flooding the global market with “subsidised overcapacity” and weaponising China’s dominance in the rare earth supply chain.