European Commission proposes EU preference in public procurement, excluding Chinese firms

European preference proposed for public contracts across key sectors

Usagevpn.com – The European Commission has put forward a plan that would give public authorities across the EU greater scope to favour European businesses when awarding contracts in essential public-service sectors. The proposal covers areas including energy, water, rail transport, ports, airports and postal services, placing public purchasing power at the centre of the bloc’s broader economic and trade strategy.

The initiative arrives during tense discussions between Brussels and Beijing over trade imbalances and market access. The EU faces a trade deficit with China estimated at around €1 billion each day, increasing pressure on European policymakers to respond to concerns about competition, industrial capacity and reciprocal access to public markets.

Public procurement is a significant lever for the European economy. European public contracts are valued at roughly €2 trillion annually, equivalent to about 15% of the EU’s GDP. The Commission’s proposal would seek to direct more of that spending towards companies and products connected to the European market, especially where overseas competitors operate from countries that do not offer comparable opportunities to EU firms.

More authority for public buyers

Under the planned rules, local and national public authorities could bar non-European companies from tenders if their home countries deny European businesses access to their own procurement markets. The approach could also apply to European companies whose bids rely on products originating in those countries.

Commission Vice-President Stéphane Séjourné argued that public budgets should reinforce shared European objectives rather than simply select the cheapest available offer.

“Public money must serve our collective interests,”

Séjourné said that public purchasers would be able to create a European preference and exclude operators from countries where public-market access is not mutually accepted. He said the assessment could consider both a company’s nationality and the origin of the goods it offers.

“A municipality will be very clearly able to exclude a Chinese company or a European company that offers Chinese products,”

He added that authorities could assign stronger scores and greater visibility to European bids when comparing offers. In practical terms, the proposal would give contracting bodies more discretion to take origin and market reciprocity into account when selecting suppliers for strategically important services.

Quality and resilience alongside price

The Commission also wants quality to play a larger role in procurement decisions. Its proposal calls for at least 30% of the assessment of supplied goods to be based on quality criteria instead of price alone. That shift could make it harder for lower-cost imports, including Chinese products, to prevail purely on price.

For public authorities, the change would mean that tenders could place more weight on factors beyond the immediate purchase cost. The Commission has linked this approach to social and environmental considerations, as well as Europe’s ability to safeguard economic sovereignty in important sectors.

“The new standard is the best quality-price ratio, and not just the price,”

Séjourné said. He stressed that procurement choices should be capable of meeting social and environmental expectations while also addressing sovereignty concerns.

The proposal reflects a wider debate in Europe over how open public markets should remain when European companies face restrictions abroad. Procurement rules can influence long-term investment, supply relationships and the development of industrial capacity because public bodies are major purchasers of infrastructure, transport services, energy-related equipment and other essential goods.

Supporters of a European preference are likely to view it as a way to make competition more reciprocal and to ensure that public spending supports the EU’s economic interests. Critics may argue that restrictions could reduce the number of bidders or raise costs in some tenders. The Commission’s model attempts to make access conditional on whether partner countries provide European companies with comparable access to their own markets.

China warns against discrimination

China reacted quickly after the Commission presented its plans. China’s Chamber of Commerce to the EU said a European preference could undermine fair competition for Chinese companies seeking to participate in European procurement procedures.

“Public procurement should not discriminate against suppliers or goods on the basis of the supplier’s nationality or the country of origin of the goods.”

The chamber said the proposed approach could distort what it described as a level playing field in Europe’s public procurement market. The response highlights the sensitivity of the issue as Brussels seeks to press for improved access for EU firms while preserving trade links with one of its largest economic partners.

This is not the first recent dispute over a European preference. In March, a separate proposal aimed at strategic EU industries, including green technology, vehicles and energy-intensive sectors, also drew criticism from Beijing. China threatened retaliatory action at the time, underscoring the possibility that procurement and industrial-policy decisions could become part of wider trade negotiations.

Next steps in the legislative process

The Commission’s proposal is not yet law. It must be approved by the EU’s two co-legislators: the European Parliament and the Council of the EU, which represents member states. Their negotiations will determine how broadly the preference can be used, which sectors are covered and how authorities should judge whether another country offers sufficient reciprocal access.

The political context will remain important as the proposal advances. EU Trade Commissioner Maroš Šefčovič is scheduled to travel to China in early October in an effort to secure a political agreement that would help rebalance the EU’s trade relationship with Beijing.

For European cities, utilities and other public buyers, the eventual rules could reshape how contracts are designed and evaluated. Rather than treating price as the dominant consideration, the Commission is seeking a system in which quality, environmental and social objectives, origin of supply and access to foreign markets carry greater influence in decisions involving public money.