Because of its size and growth potential, China’s healthcare market is one of the most appealing in the world to international investors. China surpassed Japan to become the second-largest healthcare market. China’s healthcare market is also one of the fastest-growing among all major economies with a five-year compound annual growth rate (CAGR) of 17%, compared to just 4% in the U.S. and -2% in Japan.
China’s healthcare market was estimated at RMB5,670.3 billion (~$853.7 billion) in 2016, up 12% YoY in local currency. By sector, the medical device market soared 20.1% YoY to RMB370 billion (~$56 billion) in 2016, while pharmaceutical and health products sales amounted to RMB1,839 billion (~$277 billion), representing a yearly increase of 10.4% in the same period.
Healthcare expenditures in China more than doubled between 2006 and 2011, from $156 billion to $357 billion, inching up to almost 5% of the country’s GDP. By 2020, China’s healthcare spending is expected to hit $1.1 trillion. From pharmaceuticals, medical devices to traditional Chinese medicine, virtually every healthcare segment has benefited from the uptrend in healthcare spending.
China’s aging population, rising disposal income and household wealth, growing urbanization, and the Chinese government’s decision to provide more extensive access to medical services to its constituents are expected to fuel sustainable and healthy growth of China’s healthcare industry.
The country is investing significantly in its healthcare framework and rolling out reforms in accordance with the ‘Healthy China 2030’ blueprint introduced in 2016, making public health a precondition for future social and economic development. The blueprint has specific goals, including an increase in the capacity of healthcare services, improving the healthcare system and expanding the scale of the healthcare industry.
The implementation of the ‘Healthy China 2030’ initiative involves buildouts of healthcare infrastructure, the broadening of national insurance coverage and heightened support for innovations, among others. These measures will have positive implications in particular for multinational companies and the country’s burgeoning e-commerce industry.
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