China is set to expand its healthcare sector by allowing the establishment of foreign-owned hospitals in nine cities, marking a significant step in the country’s ongoing efforts to reform and open up its medical and pharmaceutical industries.
Background
According to a notification released on September 8 by the Ministry of Commerce, the National Health Commission, and the National Medical Products Administration, Beijing, Tianjin, Shanghai, Nanjing, Suzhou, Fuzhou, Guangzhou, Shenzhen, and the entire island of Hainan will be allowed to set up foreign-owned hospitals. However, the notification specifies that traditional Chinese medicine hospitals are excluded, and the policy does not cover the acquisition of public hospitals.
Policy Details
The specific conditions, requirements, and procedures for setting up foreign-owned hospitals will be notified separately. This move is part of China’s broader strategy to attract foreign investment and enhance the quality of its healthcare services.
Current Openings
This initiative follows a July 11 announcement by the State Council, which agreed to temporarily adjust the implementation of certain regulations, including the Interim Regulations for the Registration Management of Private Non-enterprise Units, in six service industry pilot cities: Shenyang, Nanjing, Hangzhou, Wuhan, Guangzhou, and Chengdu. The adjusted regulations allow for the establishment of non-profit medical institutions through joint donations by Chinese and foreign entities, providing basic healthcare services.
Industry Impact
Industry experts believe that the continuous policy openness will likely lead to an increase in the number of foreign, Hong Kong, Macau, and Taiwan doctors setting up medical institutions within the country, bringing vitality to the local healthcare market.
Pan Yuanyuan, associate researcher at the Institute of World Economy and Politics of the Chinese Academy of Social Sciences, told reporters that China has recently introduced a series of significant policies to expand market access and optimize the business environment. These include measures related to cross-border data flow, biopharmaceuticals, cross-border personnel movements, and personal income tax reductions, which are aimed at enhancing the certainty and sustainability of the investment environment and consolidating foreign investor confidence.
Contrasting Regulations
It is worth noting that the Special Administrative Measures for Foreign Investment Access (Negative List) (2024 Edition) released on the same day indicates that medical institutions are limited to joint ventures. However, the exploration of opening up the medical sector is clearly underway.
Further Openings in Biotechnology
In addition to allowing foreign-owned hospitals, the notification also outlines measures to open up the biotechnology sector. Foreign-invested enterprises in the China (Beijing) Pilot Free Trade Zone, China (Shanghai) Pilot Free Trade Zone, China (Guangdong) Pilot Free Trade Zone, and Hainan Free Trade Port will be allowed to engage in the research and development of human stem cells, gene diagnosis, and treatment technology, which can be used for product registration, listing, and production.
Conclusion
The move to allow foreign-owned hospitals in select cities is a testament to China’s commitment to reforming and modernizing its healthcare sector. By attracting foreign investment and expertise, the country aims to improve the quality and diversity of healthcare services available to its citizens. As the policy unfolds, it will be interesting to observe how this shift impacts the healthcare landscape and the broader economic environment in China.
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