THE BUSINESS OF HEALTH CARE AND ELDER CARE IN CHINA
- - Insight - -
China’s healthcare and eldercare markets are large and growing fast. Yet they are still in the early stages of growth compared to other countries, offering opportunities for Canadian companies to bring technology, services and solutions to the country.
Context
The Healthy China 2030 initiative, released by the State Council in October 2016, outlines the need for rapid industry growth from innovation in pharmaceuticals and medical device technologies, optimized organizational structures and more intelligent approaches to development.
China’s population is aging – and it’s aging at a faster rate than other countries. The National Working Committee on Aging anticipates that expenditures on elder care – such as retirement homes and medical services – will rise from current levels of around 7% of GDP to 25% by 2050.[1]
Areas of Growth
The US Department of Commerce’s export.gov, says the medical device market is a “best prospect industry sector” for China. This fast-growing market has seen double-digit growth for more than a decade, with strong demand coming from hospital procurement.
Healthy China 2030 articulates the need to “provide integrated elderly care and medical services, and accelerate the development of old-age programs and industries.”[2] Currently, only about four percent[3] of eldercare institutions also provide medical services: there is a significant need – and opportunity – for this number to grow.
Opportunities for Canadian Companies
KPMG states that “Foreign investors can capitalise on favourable policies and enter markets for medical services, health insurance, aged care and internet-based healthcare services….Foreign investors can also leverage superior capabilities in health information services and big data applications, and invest in remote healthcare and ‘smart’ healthcare.”
Technology and medical devices offer opportunities for Canadian companies. export.gov lists out the devices it sees as best-selling prospects, ranging from in vitro diagnostic equipment to technology-related equipment and products.
A report from Deloitte notes that the eldercare sector is dominated by real estate developers rather than organizations with an interest in elderly care services. This offers Canadian companies opportunities to share market-tested and proven models.
Finally, as KPMG notes, there’s also a pressing need for care providers, with the number of people employed in the elder care industry alone rising from 20 million to 78 million between 2010 and 2030. BC Care Providers sees an opportunity for Canadian companies to bring their education and training capabilities to China to meet the demand for qualified and skilled caregivers.
March, 2019
[1] Caixin Global, Chart: China’s Aging Population, Jul 20, 2018.
[2] Deloitte, Trends in Integrated Elderly Care and Medical Services in China.
[3] Deloitte, Trends in Integrated Elderly Care and Medical Services in China.
Strategies to Consider
- Enter into partnerships: As is almost always the case when entering into the Chinese market, joint partnerships with local companies can help you acquire the local contacts and networks needed.
- Take advantage of new review procedures: In January 2017, the China Food and Drug Administration introduced a new “Green Channel” for medical devices, allowing for a priority review of devices that meet certain criteria.[1]
- Explore public-private partnerships. As one analyst has noted, “there are still opportunities for smaller companies that can find their niche and work with local governments that are among first movers to do something in public-private partnerships.”[2]
- Leverage the State Council’s 2018 Internet Plus health care initiative to launch innovative business models.
[1] Global Regulatory Partners, China to offer Priority Review for Medical Devices from January 2017.
[2] GBTIMES, China Could Become Innovation Hub for Elderly Care, Apr 19, 2016.