SEATTLE: China’s medical-services market is growing 18 percent annually and is projected to reach $500 billion in 2015, said Deloitte China. And consulting firm McKinsey & Co said it expects total healthcare spending to hit $1 trillion by 2020.
“China’s gross domestic product has grown by leaps and bounds, but the quality of medical care has lagged far behind,” said David Chow, chairman of Harvest Medical Investment and Operation Group, a private equity firm that planned to buy stakes in mainland hospitals. “The potential for China’s hospitals to improve is massive, both in the overall number of beds and the fees charged for each bed.”
As for hospital beds, China had 3.7 million in 2011, and the country wants at least one or two hospitals in each of its 2,853 counties by late 2015, a target that if reached could generate 400,000 new beds a year, according to some estimates.
Foreign-owned companies have only been able to independently invest in hospitals since January 30, 2014, when the government took the industry off a restricted list that required non-Chinese investors to have a local partner and capped foreign ownership at 70 per cent.
In late August, the government opened the door even wider for foreign investment, allowing fully foreign-owned hospitals.
Beijing views relaxing rules on private investment in the healthcare sector both as a way to offer more options for patients and as a boost for the reform of public hospitals, said Ellon Xu, a principal at Shanghai-based consultancy Bain & Co…