New opening up in China’s healthcare sector

On 8 September, the Ministry of Commerce (MOFCOM) of the People’s Republic of China published the Circular No. 568, concerning the establishment of Wholly Foreign-Owned hospitals in selected pilot cities, namely Beijing, Tianjin, Shanghai, Nanjing, Suzhou, Fuzhou, Guangzhou, Shenzhen, and the island of Hainan. This move represents a further development in the process of opening up the country’s health sector to foreign investments, following a similar pilot project that in 2014 introduced the possibility of establishing Wholly Foreign-Owned hospitals. However, due to the stringent requirements imposed on them, the 2014 project mainly prompted foreign investors to channel their resources towards setting up hospitals through Joint Ventures and cooperation agreements with Chinese companies. The new Circular, which do not cover the Chinese traditional medicine field and the mergers and acquisitions of public hospitals, could become a great source of attractiveness for investments in a market of increasing importance, considering the healthcare needs of the rapidly aging Chinese population. To evaluate the effective potential of the new Circular it will be necessary to wait for the specific conditions and requirements, which will be announced separately.