Greater Private-Sector Opportunities In December 2010, China took steps to promote private invest

Greater Private-Sector Opportunities

In December 2010, China took steps to promote private investment in healthcare services. New policies now allow the private sector to participate in the restructuring and management of Chinese state-owned hospitals. The aim is to convert some public health institutions into private ones.

Foreign investors will be able to participate either in joint ventures or as wholly owned foreign enterprises in the hospital sector. This is a big step from the previous restriction, where wholly foreign-owned hospitals and clinics were not allowed in China. With regard to hospital joint ventures, the previous limit of 70 percent in foreign shareholding is expected to be lifted gradually. There also are steps to simplify the business application processes for foreign participation and more equitable tax rates between state-owned and privately owned medical institutions in China.

During the next few years, new wholly owned foreign hospitals as well as hospitals under restructuring will open new opportunities for foreign medical device companies. Private investments into these Chinese hospitals will include the procurement of new medical devices for diagnostic imaging, medical disposables, implants, and cardiovascular equipment.
With an expanding medical device market in China, growth in this segment should exceed 15 percent per year through 2015.

Currently, the total market value of key medical devices in China is about $8 billion. The market size of these medical devices in the Chinese market is illustrated in Chart 1.