Overview of China’s Hospital/Clinics and Medicine Sectors | Article

Medicine

  • China does not have a “healthcare industry;” it has, instead, a “medicine industry.” The nation’s medicine industry ranks second in the world for production and is comprised of 3,613 enterprises producing almost 1,500 kinds of chemical medicines. During January-May, 2003, more than 1.1 million people were employed in the medicine industry. China is the world’s third largest medical marketplace (after the United States and Japan) and is expected to grow to US$1.7 billion by 2006. (http://bizchina.chinadaily.com.cn/guide/industry/industry14.htm)
  • Most of the world’s major pharmaceutical companies are operating in China, and many are committed to invest in training for Chinese investigators. China’s State Drug Administration offers market exclusivity to companies that conduct studies in China. Because of its aging population and increasing wealth, China is among the world’s marketplaces deemed as being great opportunities for increased sales by US pharmaceutical companies.
  • The August 2003 “International Conference & Exhibition of the Modernisation of Chinese Medicine & Health Products (ICMCM)” proclaims Hong Kong as being in the strongest position to further develop the Chinese medicine industry. Besides its ideal geographical location, and the fact that it is a melting pot of Chinese and Western cultures, Hong Kong has the necessary capital, technology, and workforce.

Hospitals/Clinics

  • Because of the low income of peasant farmers in rural areas — along with the high number of unemployed people — many Chinese cannot afford healthcare. More than 70% (900 million people) of China’s population lives in rural areas. The cost of one average hospitalization exceeds the average annual income of 50% of the rural population. (source: “The Healthcare Industry in China, 2003: A Report for Genesis Health Sciences,” Genesis Technology Group)
  • HIV/AIDS and Hepatitis C are rampant and rising among the population. Approximately 20 million babies are born annually in China, and infant mortality is 32 out of every 1,000 live births. Safe water is not available to 25% of the population

Examples of existing foreign investment in China’s healthcare sector include:

  • Xian Gaoxin Hospital, the largest joint venture hospital in China, opened in November 2002. Joint venture partners are Xian Shenxin Venture Capital Co., Ltd (contributing US$45.37 million) and Cyber International Company of the British Virgin Islands (contributing US$39.1 million).
  • AstraZeneca Pharmaceuticals LP, the world’s fifth largest pharmaceutical company, signed a letter of intent in December 2003 with the Guanghua School of Management of Peking University to donate funds to establish a research, consultation and training project for hospital and drugstore management.
  • Milwaukee, Wisconsin’s Center for International Health, signed an agreement in March 2004 with the city of Shanghai to provide training and technical assistance to help improve the city’s emergency medical response system. The agreement includes a provision for taking Shanghai health professionals to Wisconsin for training.


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