By Chris Sevcik, Director of International Trade Services, WTCGP
The healthcare market in China continues to increase. In 2017, the market value was $761 billion and it is expected to reach $1.19 trillion by 2020 and then $2.39 trillion by 2030. Growth is fueled by an aging population, an expanding middle class and advancements in medical technology. As the market continues to develop, opportunities for US firms expand.
Entering the Chinese market may seem like a daunting task, but the market is forecasted to continue its strong growth over the foreseeable future. As long as you are innovative and a cost competitor, the Chinese market place should not be an issue for growth says Dr. John Bennett, CEO of Devon International Group.
The main pillar of China’s healthcare service plan is increasing private capital in the healthcare system. This will be achieved through the development of private hospitals or through public-private partnerships as China has indicated that it will curb large-scale public hospital expansions. From 2013 to 2018, private hospitals have had a compound annual growth rate (CARG) of 13.1% while public hospitals had a growth rate of -2%. While the growth rate of public hospitals was negative during this time, public funding has become more concentrated and now targets improving the existing public hospitals over constructing new ones.
In 2018, public hospitals spent more than $350 billion, and it is projected that by 2022 the market value will be 71% higher than 2018 levels. In order to ensure sufficient funding, China is promoting public-private partnerships. The Chinese government is also removing restrictions on foreign investors owning and running private hospitals and is encouraging that they participate in restructuring public hospitals; however, they have warned against a rush to sell-off state-owned hospitals to private entities. Some foreign entities have developed private hospitals in China, but a large structural shift towards private hospitals is yet to develop.