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Medical Devices: China’s Growing Market

In the 21st century, the medical equipment industry will experience a fast development period. With the deepening of the implement of opening-up and reform policy, the living standard and quality of Chinese people have been greatly increased. This has resulted in the high demand for better medical and healthcare services. This competitive environment has led to increasingly innovative solutions in the medical industry. Taking military hospitals for example, the total value of medical instruments and equipment at the moment is 15 times of the figure in late 1970s.

The imported equipment and instruments occupy 86 % of the total values thus providing that China is a very promising market for the medical products. In 2000, China spent approximately US$1.4 billion on imported medical devices, a 15.5 percent increase over 1999. In the first half of 2001, China imported US$891.7 million worth of medical devices, a 54 percent increase over the same period in 2000. The increase is partly due to the continued clearing up of gray channel imports, and the relaxing of numerous registration regulations. Sales volumes have recovered as new registration procedures and regulations have gradually been accepted, and the backlog of certificate renewals for products that have been in China for four or more years is now being addressed.

The domestic medical device industry has advanced rapidly over the past twenty years since China started its economic reform policy in 1979. Deng Xiaoping, the late state leader, led the change from a planned economy to a market economy with a consistent annual economic growth since 1979. Presently, with 2900 medical device manufacturers, total output value is USD 2 billion with a capacity to produce 12000 specifications, 3500 varieties in 47 categories. By the year 2000, total output value is expected to reach RMB 30 50 billion yuan (USD 3.62 6.04 billion).

Recently, science and technology have been widely applied to the medical device sector. Large hospitals have utilized advanced medical equipment such as the CT-X ray, MRI, Linear Accelerator, Ultrasonic-B and other high-grade precision medical devices and have upgraded existing equipment. According to the State Drug Administration, since 1996 over half of all product registrations were submitted for "complex mechanical, electronical technology" devices.

Installation of new medical devices in hospitals is constantly increasing, and several hospitals in big cities boast of some of the world’s most advanced medical equipment, with even RK and PRK treatment centers operating in some major cities. According to a recent official survey of large medical equipment, China has 330 units of MRIs, 2,300 sets of CTs, 300 Linear Accelerators, around 2,500 Color Ultrasonic-B and 13 Gamma-Knives.

Despite these advances, a population of 1.2 billion still desires better health services. China continues to need more advanced domestic and foreign medical devices for hospitals, specially in rural areas. According to domestic medical experts, the increasing demand for medical devices is due to the following factors:

• The increasing population each year

• The rapid economic development that encourages hospitals to buy new equipment

• The government policy aimed at upgrading health standards.

Among the 180,000 medical institutions in China, 15 percent are equipped with medical devices from the 60s and 70s. Demand for advanced medical equipment, conventional laboratory instruments, dental devices, small Ultrasonic-Bs, and small-type X-rays is expected to continue through 2000.

Comparison between import and export values of Medical Appliance in 2001 (Unit: USD 100 million)

The trade deficit (imports vs. exports) amounted to value of US$788 million in 2001.

Some of medical equipment’s import situation in China  <Continue>