China’s healthcare system has made significant strides in managing medical services and expanding public health access. However, the ageing population poses a growing challenge, and the gap between supply and demand continues to widen. The total market size of China’s medical, health, and pharmaceutical sectors is estimated at approximately RMB 8 trillion, offering substantial opportunities for foreign companies to support the country’s evolving needs. 

China’s hospital network is one of the largest and most complex globally, including both public and private facilities. Operating under a tiered structure, it addresses a wide range of healthcare needs, with private hospitals increasingly complementing the extensive public infrastructure. 

Lifted restrictions on foreign investment 

In September 2024, China’s Ministry of Commerce, National Health Commission, and National Medical Products Administration introduced a policy allowing wholly foreign-owned hospitals in major cities such as Beijing and Shanghai. Previously, foreign investments in medical institutions were restricted to joint ventures. These new hospitals are expected to cater primarily to individuals with high-end commercial insurance outside China’s public health system.   

This policy shift opens opportunities for Swedish pharmaceutical and med-tech companies. These facilities are likely to adopt cutting-edge medical devices and pharmaceuticals. Additionally, the changes pave the way for advancements in hospital design, creating further prospects for companies in this sector. 

Key considerations for foreign-invested hospitals: 
  • Bioinformation security: Compliance with regulations on protecting and managing human genetic resources.
  • Fast-track approvals: Streamlining the approval and marketing of internationally approved medicines and medical devices for use in foreign-invested hospitals. 

On 29 November 2024, a joint work plan from China’s National Health Commission, Ministry of Commerce, National Administration of Traditional Chinese Medicine, and National Disease Control and Prevention Administration clarified operational boundaries for foreign-invested hospitals. These hospitals can operate as general, speciality, or rehabilitation facilities but are excluded from areas such as traditional Chinese medicine, public hospital acquisitions, and high-risk medical or ethical activities, including organ transplantation, assisted reproductive technologies, and psychiatric inpatient care. 

Pilot programmes for biotechnology 

Foreign-invested enterprises are not permitted to engage in the registration, marketing, and production of cell and gene therapies within designated free trade zones, including Beijing, Shanghai, Guangdong, and the Hainan Free Trade Port. This policy is expected to expand to additional cities and regions with strong cell and gene therapy capabilities, further encouraging foreign investment in China’s growing biotech sector. 

These reforms enable multinational companies to more easily introduce advanced technologies and collaborate with Chinese research institutions and enterprises. Such partnerships foster the joint development of innovative products and technologies. 

For example, Merck Testing, a German company, expanded its business scope in Shanghai to include stem cell and gene therapy testing, bringing these advanced capabilities from its headquarters to the Chinese market. Additionally, five other foreign-invested enterprises have updated their business scopes, enabling cell and gene therapy-related operations within the Shanghai Pilot Free Trade Zone. 

Opportunities for Swedish life science and med-tech companies 

Sweden, ranked eighth in the World Index of Healthcare Innovation, boasts a robust life science sector and a thriving pharmaceutical industry, which forms a significant part of Sweden’s exports. Recent policy changes in China can provide opportunities for Swedish companies to expand in the world’s second-largest healthcare market. 

Since 2015, Business Sweden has operated the Life Science Platform in China, supporting Swedish companies in positioning their solutions through targeted activities and collaborations. 

Want to know more? Contact us today to explore upcoming opportunities: 

China’s healthcare market is evolving rapidly – Swedish companies are uniquely positioned to contribute and thrive in this dynamic sector.