9 Major Cities Ease Restrictions, Foreign-Owned Single-Entity Hospitals Surge, Is There a Hidden Crisis Behind China's Economic Stimulus?

The Chinese government has announced that it will allow wholly foreign-owned hospitals to be set up in nine regions, including Beijing, in a bid to attract foreign investment and stimulate the economy to boost the flagging economy.

The Ministry of Commerce, the National Health Commission and the State Food and Drug Administration jointly issued a document, deciding to expand the pilot work in the field of biotechnology and wholly owned hospitals. In the field of biotechnology, foreign-invested enterprises will be allowed to engage in human stem cell, gene diagnosis and treatment technology development and technology application 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. All products registered and approved for production will be available for use throughout the country. In the field of hospitals, we plan to set up wholly foreign-owned hospitals in Beijing, Tianjin, Shanghai, Nanjing, Suzhou, Fuzhou, Guangzhou, Shenzhen and the whole island of Hainan (except for traditional Chinese medicine, excluding the acquisition of public hospitals). Specific conditions, requirements and procedures will be notified separately.

In recent years, top foreign medical institutions have shown strong interest in the growth of China's high-end medical demand market. For example, Mayo Clinic of the United States has set up its first office in Shanghai United Family Hospital and plans to conduct long-term cooperation with China in joint treatment, international academic exchanges, clinical training and other areas to improve the accessibility of international cutting-edge medical technologies in China.

Experts pointed out that China's medical level has made remarkable progress in the past decades, especially in the field of treatment of certain diseases, and China's medical level has become a global leader. Chinese doctors have also accumulated rich experience in treatment. As early as 2014, the National Health and Family Planning Commission and the Ministry of Commerce allowed foreign investors to set up wholly foreign-owned hospitals in Beijing, Tianjin, Shanghai, Jiangsu, Fujian, Guangdong and Hainan through new facilities or mergers and acquisitions. The approval authority for the establishment of wholly foreign-owned hospitals is delegated to the provincial level, and its establishment and change shall be handled in accordance with relevant laws and regulations.

The new policy aims to attract foreign investment, promote high-quality development in China's medical related fields, and better meet the medical and health needs of the people. The new policy does not include mergers and acquisitions of TCM hospitals and public hospitals, and specific conditions, requirements and procedures will be announced soon. In addition, the policy allows companies with foreign investors to engage in the development and application of gene and human stem cell technologies for treatment and diagnosis in pilot free trade zones in Beijing, Shanghai, Guangdong and Hainan. The opening of these sectors comes against a backdrop of growth headwinds in the world's second-largest economy and low confidence among foreign businesses.