WTO "information technology agreement" expands the scope of domestic medical equipment forced to reduce price

Source: medical device innovation network (2015-07-30) recently, it was learned from the Ministry of commerce that the participants in the WTO negotiations on expanding the product scope of the information technology agreement announced an agreement on the product scope in Geneva on the 24th, forming a list of 201 expanded products, and the negotiating parties, including China, agreed to set up a list of 201 expanded products within three years Zero tariff for information technology products This is the largest tariff reduction agreement reached by the WTO in 18 years, and also a larger tax reduction agreement in the history of medical equipment products Although the IT agreement has brought benefits to many industries in China, it may be an exception for the domestic medical equipment industry The reduction of tariff may make the life of domestic equipment manufacturers more difficult After the new agreement on forced price reduction of domestic medical devices is reached, tariffs on more than 20 medical devices, including cardiac pacemakers, MRI equipment, MRI equipment and ultrasound scanning equipment, will be cancelled (see the table below for details) According to foreign media reports, before the agreement was reached, the import tariff of the above-mentioned medical devices in the relevant countries was as high as 8% (click the picture to see the big picture) according to the data of the National Bureau of statistics, from 2001 to 2014, the total sales volume of China's medical device industry increased from 17.9 billion yuan to about 2020, and in 2013, it successfully surpassed Japan as the second largest medical device market According to a recent report by the General Administration of customs, the medical equipment imported by Xiamen Customs in January April alone reached 170 million yuan, an increase of 34.1% year on year However, in China's medical device manufacturing industry, a few products have their own patents, and most of them are low-end products Homogenization is very serious, which makes enterprises have to compete for sales through price competition In other words, tariff reduction will make the utilization rate of imported devices continue to expand, and the result is likely to force domestic devices to reduce prices And the tax cut will have a great impact on a series of domestic medical devices, such as domestic pacemakers and MRI equipment, because despite the price, doctors and patients will first consider the use of imported devices Although this is a major good for doctors and patients, it will certainly cause a big blow to the domestic equipment manufacturers The development of medical equipment industry in China is small and scattered The lack of high-end brands is the fatal weakness of the industry Although the current capacity scale of China's medical equipment industry is as high as 300 billion yuan, and domestic manufacturing accounts for only 30% of it, the low-end product, low-end technology and low-end quality are the key factors that domestic manufacturing cannot compete with imported products And in the whole medical equipment field, the output ratio of Chinese medical equipment products is 9:1, which is far away from the 1:1 of European and American countries The market potential needs to be explored, and the technical level and manufacturing capacity need to be strengthened simultaneously In contrast, high-end medical equipment products are heavily dependent on imports and are concentrated in the hands of a few multinational companies: Ge in the United States, Siemens in Germany and Philips in the Netherlands Domestic high-end equipment products are basically monopolized by several foreign companies, and the products of domestic manufacturers are at the low and medium level The tariff imposed on imported products in China is very low, and the tariff of domestic products is not high Domestic products are mainly exported to Southeast Asia, Africa and other underdeveloped countries and regions In May this year, Neusoft group released its first domestic 128 layer CT machine Before that, only a few Ge, Siemens and Philips were able to manufacture the product on the market This seems to be a microcosm of China's medical equipment market On the one hand, the market is getting bigger and bigger On the other hand, Chinese enterprises are trying hard to get food from foreign powers If at this time, the tariff which was not high would be cancelled, the foreign powers would be more like fish in water.