China's medtech tenders now specify how much must be domestic
Localisation of finished medical equipment is well advanced, while CT tubes remain under 10% domestic. The gap between those two numbers is where European manufacturers still have a business — and it is closing deliberately.
European medical technology manufacturers in China face a peculiar position: absolute sales are rising while market share falls. The market grows faster than they capture it. Understanding why requires looking at where localisation has actually reached, which is far from uniform.
Substitution by segment
Medical technology is a core industry in Made in China 2025, and the 2030 import substitution target is realistic — because much of it has already happened.
- Low-value consumables — syringes, infusion sets and similar: over 90% localised
- Mid-range equipment — monitors, ultrasound: around 70%
- High-end imaging — accelerating fast. United Imaging's PET-CT holds over 30% of new domestic installations and has begun entering European and American markets
- Core components — a different picture entirely. CT tube localisation was under 10% in 2024, and MRI superconducting magnets remain heavily import-dependent
That last line is the commercially important one. China builds the finished machine and imports the part that makes it work. Companies like Yirui Technology have made technical breakthroughs on high-end tubes with mass production expected, so the gap is narrowing — but as of now, precision sensors, high-end chips and imaging tubes remain the dependency.
Finished goods are largely substituted. Core components are the critical stage.
The fragmentation is policy, not accident
China has roughly 23,000 medical device companies, over 90% of them small and medium enterprises. Concentration is low.
The state reads this as a phase to be managed rather than a permanent structure, and is actively consolidating. Beijing's Action Plan for the Medical Device Industry (2024–2026) supports mergers and restructuring and calls for more than five specialised industrial parks. Centralised procurement accelerates the exit of outdated capacity, while leading firms are encouraged to expand through technology upgrading and acquisition — Mindray buying Zonare to extend its ultrasound position, United Imaging integrating its supply chain to compete at the high end.
The judgement embedded in this is that fragmentation provides innovation soil early and duplicated capacity later, and that the moment to consolidate is when domestic champions can absorb the rest.
Profitability tells you where to compete
The sector is profitable, but sharply divergent — and the divergence maps precisely onto where the state has intervened.
At the high end, margins are strong. Mindray's net margin reached 37.4% in FY2023/24; United Imaging's 17.3%. For comparison, GE Healthcare's was 7.1%.
At the low end, centralised procurement has compressed everything. Cardiac stent prices fell over 90% after centralised purchasing. Leading firms remain profitable on scale; nobody else does.
New growth is coming from policy-driven equipment renewal, particularly county-level hospital upgrades, and from AI-assisted diagnostics.
A European manufacturer reading those margin numbers should note that the profitable Chinese segments are the ones where domestic firms have technology, and the unprofitable ones are where the state decided prices should fall.
The national champions and what they receive
Mindray benefits directly from domestic substitution preference in government tenders — 83% share in Hainan's centralised ultrasound procurement. Its R&D sits within MIIT special support programmes, including monitor chip localisation, with financial subsidy attached.
United Imaging has its PET-CT and 7T MRI in the Special Approval Channel for Innovative Medical Devices, which accelerates market authorisation. It has received government special funds including a ¥300 million R&D subsidy and participates in major national research programmes.
The support is layered: national R&D projects funding key technologies like CT tubes and surgical robots, with individual project subsidies reaching tens of millions of yuan; a central government interest subsidy of 2.5 percentage points over two years on hospital equipment procurement loans, which released over ¥200 billion of demand in 2022; local government guidance funds taking equity positions; and high-tech enterprise income tax reduced to 15% with R&D expense super-deduction at 100%.
The tender rules are explicit
This is the part European manufacturers most need to read precisely, because it is unusually specific.
The Ministry of Finance stipulates that 137 categories of medical device must be 100% domestically sourced, and a further 41 categories between 25% and 75% domestic.
Beyond the quotas, tender criteria cover technical parameters such as CT resolution, after-sales service measured by localised response time, and price — where imported equipment is often required to come in more than 30% below its own norm to compete.
Western companies do still win. GE Healthcare took Hainan's centralised procurement in cardiac ultrasound. But the trend is unambiguous: domestic ultrasound equipment reached 65% market share in 2024, leaving foreign brands 35%.
Priority technologies for state promotion are named: high-end imaging (7T MRI, PET-CT, digital subtraction angiography), surgical robots targeting 0.2 mm accuracy across orthopaedic, laparoscopic and neurosurgical applications, AI diagnostics and remote monitoring, core components (CT tubes, superconducting magnets, high-end sensors), and biomaterials including biodegradable implants.
Who owns what
The ownership split is clearer than the "mixed" label suggests.
State-owned enterprises lead large medical infrastructure such as regional medical centres, public health emergency equipment including ECMO, and military-adjacent technology like field medical systems.
Private firms lead mid-to-high-end equipment including ultrasound and CT, high-value consumables such as cardiac stents, and innovative technology — AI diagnostics and surgical robotics.
Mixed ownership appears in high-end imaging and in vitro diagnostics, where private firms like United Imaging and Mindray lead on technology while state entities participate upstream in materials and core components.
The state has positioned itself where the bottleneck is.
What this means if you are on the European side
Sell components, not systems. CT tubes under 10% localised, superconducting magnets, precision sensors and high-end chips are where the dependency is real and the tender quotas do not bite the same way. Finished equipment is competing against a 100%-domestic requirement across 137 categories.
Check your product against the quota lists before modelling the market. A device in the 137 is not a commercial opportunity in public procurement, whatever its technical merit. A device in the 41 is a partial one. This is a binary that ordinary market sizing will miss entirely.
Expect United Imaging and Mindray in European tenders. United Imaging's PET-CT is already entering Western markets and participating in IEEE standards development. Firms with 37% margins at home and state R&D backing are well capitalised for export, and the Hainan Boao Lecheng pilot — which lets unapproved imported equipment be used early — is explicitly designed to help domestic firms gather clinical data.
The window is in the components, and it is being closed on a funded timetable with the target technologies published in advance. That is unusually good visibility, and it should be used.