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Healthcare Products & Services

Industry Overview

China is now the world’s 2nd largest market for medical equipment. It offers significant potential for U.S. companies interested in expanding into the Chinese market with the huge demand for better healthcare services driven by increasing aging population and improved medical insurance coverage. While the Chinese medical device companies provide low to mid-range technology and products, they generally lack the expertise and experience deemed appropriate by Western standards. The Chinese also view foreign medical device companies as more credible than their Chinese counterparts. The Chinese healthcare market is poised to be explored by those foreign enterprises interested.

According to statistics from World Trade Atlas (China Customs), by the end of 2011, China’s import and export value reached US$21.6billion, an increase of 23% over 2010. Please see the top three countries in the import and export of medical equipment to China from 2010 to 2011. It shows that U.S. is the top exporter of medical devices to China, accounting for over 30% of the total followed by Germany and Japan:

Country/ Region

Medical Device Import Value

(in USD billions)

Medical Device Export Value

(in USD billions)

 

2010

Share

2011

Share

2010

Share

2011

Share

World

7.17

100%

8.54

100%

10.39

100%

13.06

100%

U.S.

1.79

32%

2.06

30%

3.59

33%

4.43

32%

Germany

0.5

8%

0.62

7%

1.8

18%

2.34

19%

Japan

2.83

8%

0.96

8%

1.68

14%

2.07

14%

Source: World Trade Atlas (China Customs). HS Code: 9018, 9019, 9020, 9021, 9022,382200,902780,902750,902730,902720

China is the most promising medical device market in the world. Its annual growth rate has been at 15% to 20% depending on products. Based on the BMI (Business Monitor International) report, China’s medical equipment market reached a total size of RMB117 billion (US$18.2 billion) in 2011. Major driving factors include demand for better healthcare services, the increasing aging population, and the improved and full medical coverage for all nationals .Recently, the Ministry of Health (MOH) has issued the notice to promote the development of nonpublic medical institutions to meet the shortage of medical resources, requiring giving priority approval should be given to privately-invested medical institutions that meet entry standards when adjusting or increasing new healthcare resources. It stated that by 2015 the number of beds and services should account for about 20% of the total. This will lead to greater needs for medical equipment in the future.

Chinese end users consider U.S. products to be of superior quality and most technologically advanced. China’s hospitals particularly welcome medical equipment and products with high content of technology. At the same time, domestic medical device companies are consolidating, upgrading quality, and beginning to compete in medium-level technology niches. Main competitors for American companies include those from EU or Japan as their respective markets for healthcare are structured and well developed.

All imported medical devices are required to register with the State Food and Drug Administration (SFDA) before being sold in the Chinese market. The SFDA has a comprehensive system for medical device registration and inspection, which includes product type testing and factory audits. Medical devices are divided into three classes depending on levels of risks similar to but stricter than that of USFDA. Clinical trials are required for registration of Class III and some Class II medical devices. The process normally takes from one to three years.

Barriers exist with an uncertain regulatory environment and extensive delays in registration and reregistration of products, although efforts are reportedly being made to reduce the large backlog. Additionally, pricing, tender, and bar code systems also play a role of delaying a company’s entry into the Chinese medical device market.

Best Products/Services

Notable prospects in the Medical Device sector include:

  • In vitro diagnostic equipment and reagents:
    Clinical and diagnostic analysis equipment, diagnostic reagents, medical test and basic equipment instruments
  • Implantable and intervention materials and artificial organs:
    Interventional materials, implantable artificial organs, contact artificial organs, stent, implantable materials, and artificial organ assisting equipment.
  • Therapeutic products:
    Tri-dimensional Ultrasonic focused therapeutic system, body rotary Gamma knife, simulator, linear accelerator, laser diagnostic and surgery equipment, nuclide treatment equipment, physical and rehabilitation equipment.
  • Medical diagnostic and imaging equipment:
    Black & white and colored supersonic diagnostic unit, sleeping monitor, digital X-ray system, MRI, CT, DR, and ultrasound equipment.
  • Surgery & emergency appliances:
    Anaesthesis ventilation systems and components: high frequency surgery equipment, high frequency and voltage generators.
  • Healthcare Information technology related equipment and products:
    Medical software, computer aided diagnostic equipment, and hospital informatization system (HIS, CIS, HLT).

Care and Rehabilitation Equipment Market in China

The market for equipment and products for the aged and the disabled including medical is showing signs of growth and potential as the Chinese population ages and as the Chinese government provides more support for the elderly and physically challenged population. China has developed a legal framework protecting the rights of persons with disabilities covering basic rights as well as access to education and jobs and public facilities and is working on policies for barrier–free access to transportation and information. Growing levels of personal wealth also provide families the means to purchase products and devices for improved mobility and quality of life.

Key Points

  • China has about 83 million disabled persons with 80% of those requiring assistive devices; 65 million cannot live without assistive devices.
  • Senior citizens in China in 2012 accounted for 14.3% of total population, numbering 194 million. By 2053, number is expected to reach 487 million.
  • A comprehensive legal framework protecting the rights of persons with disabilities has been developed over the last 15 years covering access to education, jobs and public facilities.
  • To facilitate the importation of imported products, China plans to eliminate import duties for qualifying products.
  • China announced in April 2009 that it will promote the construction of a barrier-free environment for the disabled in 100 cities by the year 2010. According to the plan, assistance techniques or substitute technologies such as Braille, sign language, captions and special communication facilities are to be adopted to pave the way for the disabled to participate in social activities. TV programs with sign language and special broadcasting programs for the disabled are to be launched, together with the subtitling of TV programs and films. Standardized community rehabilitation services will be carried out nationwide in 80 percent of urban districts and 70 percent of counties, which will benefit 2 million disabled people.

Market Entry

Chinese consumers lack information about many products available internationally, particularly those from the United States. Promotion at trade shows and working through well-known organizations such as the China Disabled Person’s Federation (CDPF) can help to establish new to market firms. The major trade show in China for this sector is Care & Rehabilitation Expo China (C&R Expo China).

Contact: Mrs. Yawei Du
Organizing Committee of C&R Expo China
Tel: 0086 10 6446 6967 ext. 807
Fax: 0086 10 6446 6925
Email: crexpo@crexpo.com.cn
Website: www.crexpo.com.cn

Brief Overview:
C&R Expo China is the largest exhibition in China focused exclusively on the care and rehabilitation industry. C&R Expo China is endorsed by senior government senior-level government officials, and has extensive influence across the industry. In keeping with rapid growth across the Care & Rehab industry, C&R Expo China has grown substantially over the past three years. C&R Expo China attracts companies from more than 15 countries to exhibit, and in 2008 there were more than 100,000 visitors. C&R Expo China offers you a platform to look for suitable partners, to establish distributing channels and to understand the needs of end-users.

The Commercial Service of the U.S. Embassy in Beijing has been working closely with the organizer to attract interested U.S. companies to exhibit at the show and provide assistance in their efforts into the Chinese market.

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Available Market Research

  • Privatization of Healthcare in the Yangtze River Delta, June 2014
  • Clinical Laboratory Market: buyusainfo.net/docs/x_5325735.pdf
  • Ophthalmic Equipment and Products Market: bit.ly/NkQbIX
  • Gynecological Devices and Products: buyusainfo.net/docs/x_3244830.pdf
  • Pre-hospital Emergency Medical Service and Equipment: buyusainfo.net/docs/x_918621.pdf
  • Measures for the Administration of Medical Device Registration (English Translation):

buyusainfo.net/docs/x_525872.pdf

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Useful Websites

China’s Health Care Reform (English)
China Business Information Center (U.S. Department of Commerce)

American Chamber of Commerce, China

American Chamber of Commerce, Shanghai

US-China Business Council

Guide to Investment in China

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U.S. Commercial Service Contacts

The U.S. Commercial Service offers a broad array of market entry services to U.S. companies in the healthcare industry. Please refer to the following relevant contacts for additional information on how we can help you expand your business in China.

Beijing Office:
Tel: (86-10) 8531-3000
Fax: (86-10) 8531-3701
Shuyu Sun

Shanghai Office:
Tel: (86-21) 6279- 7630
Fax: (86-21) 6279-7639
Xiaoli Pan

Guangzhou Office:
Tel: (86-20) 3814-5000
Fax: (86-20) 3814-5310
Angela Han

Chengdu Office:
Tel: (86-28) 8558-3992
Fax: (86-28) 8558-3991
Ling Chen

Shenyang Office:
Tel: (86-24)2322-1198
Fax: (86-24)2322-2206
Yang Liu

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