At the meeting, Lei Haichao, the director of the National Health Commission, mentioned the importance of leveraging the role of the non-public economy and foreign investment in the field of health and wellness. He hopes that Chinese and foreign enterprises will strengthen their confidence in development and actively participate in deepening medical reform, strengthening healthcare infrastructure, prevention and control of key infectious diseases and chronic diseases, pediatric and mental health services, high-quality population development, and pharmaceutical innovation.

From the recent actions taken by the state in the healthcare sector, it is evident that non-public and foreign-funded economies are increasingly playing a significant role, with corresponding policy support also being rolled out successively.

In February this year, the Ministry of Commerce and the National Development and Reform Commission issued the *2025 Action Plan for Stabilizing Foreign Investment* (referred to as the *Plan*), which mentioned expanding pilot openings in the medical field, including supporting pilot regions in promoting and implementing open pilot policies in value-added telecommunications, biotechnology, and wholly foreign-owned hospitals.

The Plan clearly states that for areas outside the negative list for foreign investment access, the management of foreign investment access must be strictly implemented according to the principle of equal treatment for domestic and foreign investment. The negative list for market access will be revised to further reduce the number of items on the list, expanding openness to all types of business entities.

During the 2025 annual meeting of the China Development Forum, multinational medical device giants such as Medtronic and Siemens expressed their commitment to investing in China, and recent achievements have already been realized.

On March 24, the signing and unveiling ceremony of Medtronic's Digital Medical Innovation Base took place at the International Pharmaceutical Innovation Park, marking Medtronic's first digital medical innovation base established in China.

Medical devices are a capital-intensive industry, and due to their impact on public health, their business development is strongly correlated with policy directions. Additionally, as the domestic medical device industry is rapidly rising, it has already formed direct competition with multinational companies.

For the national level, if it wants to attract continuous foreign investment in the domestic medical device field, it clearly needs to provide sufficient sincerity in policy terms.

As early as 2021, the Ministry of Finance clearly stated in the "Notice on Implementing Policies to Treat Domestic and Foreign Enterprises Equally in Government Procurement Activities" that in government procurement activities, except for procurement projects involving national security and state secrets, products produced by domestic and foreign enterprises within China should not be treated differently.

The "2025 Action Plan for Stabilizing Foreign Investment" also reiterated the need to continuously optimize the business environment and effectively implement national treatment for foreign-funded enterprises.

The protection and support of national policies can provide confidence for foreign investment, but for foreign medical device companies, the true core attraction remains China's vast product demand, which has been fully demonstrated in recent market trends.

In December 2024, the fifth batch of national centralized procurement of medical consumables opened for bidding, with the price of cochlear implant consumables (including the implant and speech processor) dropping from an average of over 200,000 yuan to around 50,000 yuan, attracting significant attention. The lowest winning bid for peripheral vascular intervention consumables was 2,280 yuan, a reduction of more than 50%.

In this intense price war, foreign-funded companies have shown extremely high participation enthusiasm, securing first place in all four categories (cochlear implants and three peripheral vascular stent groups) with leading foreign enterprises winning the bids. This demonstrates that as long as the overall market size is sufficiently large, foreign companies are willing to make price concessions to gain market share.

According to the "China Medical Device Industry Blue Book (2024)", the market size of China's medical device industry showed a year-on-year upward trend from 2016 to 2023. In 2023, the market size of China's medical device industry reached 1,032.8 billion yuan, increasing by 5.07% year-on-year, with a compound annual growth rate of 16.12% from 2016 to 2023.

With the continuous optimization of the business environment for foreign investment, the strong capital-attracting power inherent in such a vast market will accelerate its realization, and the domestic medical device industry will also enter an era of full competition.

The hospital sector is accelerating its opening-up.

The spring of high-end private healthcare is coming.

If the medical device sector has traditionally been a stronghold for non-public economy, and expanding foreign access is a routine move, then recent pilots for foreign hospitals demonstrate the country’s resolve in opening up.

In November last year, the National Health Commission, the Ministry of Commerce, and three other departments jointly issued the "Pilot Work Plan for Expanding Opening Up in the Field of Wholly Foreign-Owned Hospitals," allowing the establishment of wholly foreign-owned hospitals in Beijing, Tianjin, Shanghai, Nanjing, Suzhou, Fuzhou, Guangzhou, Shenzhen, and the whole Hainan Island.

As of now, Tianjin, Shanghai, Guangzhou, and Shenzhen have announced the establishment of wholly foreign-owned hospitals, with several already in operation.

According to national plans, foreign-funded hospitals in the pilot program must meet the conditions of "being able to provide internationally advanced hospital management concepts, management models, and service models" and "being able to provide medical technologies and equipment at an internationally leading level." This means that it is expected for foreign-funded hospitals to engage in high-end business, and it also represents a new market growth space for domestic high-end medical equipment and innovative drugs.

For instance, Guangzhou Baiyun Prime Healthcare Hospital will focus on introducing cutting-edge international technologies such as CAR-T cell therapy, T-cell receptor engineering, targeted therapy, and gene editing, while promoting the alignment of Guangzhou's medical technology, medical equipment, management philosophy, and service model with international standards.

Tianjin Pengruili Hospital has basically coordinated 150 kinds of imported drugs and original research drugs. It can apply for innovative drugs and medical devices that have been approved abroad but have not been approved in China, and the fastest approval can be obtained through the local drug regulatory authorities in one month.

In addition to foreign investment, there have been consecutive significant announcements in the local non-public medical sector.

The Beijing Municipal Health Commission recently issued a notice titled "Approval for Douyin Group's Establishment of the Beijing Aiyi Hospital (Tentative) Project" on its official website. According to the public registration change information for Beijing Aiyi Hospital (Tentative), the hospital is a for-profit, tertiary comprehensive Sino-foreign joint venture with 800 beds.

Tencent-backed premium comprehensive healthcare provider United Family Healthcare (UFH) has updated its prospectus after its initial attempt to list on the Hong Kong Stock Exchange in May last year. Currently, UFH owns and operates 20 healthcare facilities across China, including 18 clinics and two hospitals.

Private hospitals in China have developed for many years but have failed to overcome their own challenges.

According to the "2022 Statistical Bulletin on the Development of China's Health and Wellness Sector," by the end of 2022, there were a total of 36,976 hospitals nationwide in China, including 11,746 public hospitals and 25,230 private hospitals.

Although the overall number has achieved a reversal, the situation of private hospitals being "small, scattered, and chaotic" has not been fundamentally changed. According to the 2022 data, the total number of hospital beds nationwide is 7.663 million, with public hospitals accounting for 70.0%, while the more numerous private hospitals only account for 30.0%.

In addition, compared to domestic public hospitals, non-public medical institutions face greater operational pressures. According to the "China Health Statistics Yearbook 2021," the 23,500 non-public medical institutions nationwide reported a combined annual loss of 130 billion yuan, averaging a loss of 5.53 million yuan per institution.

In response to the national signal emphasizing the important role of non-public capital and foreign capital in the healthcare sector, the domestic medical ecosystem is expected to undergo new changes. From the pilot opening of foreign-owned hospitals to the entry of local capital such as Douyin (TikTok) and Tencent, the spring of non-public hospitals may be on its way.

In the current development trend, local medical device enterprises and public hospitals may face new challenges. But this is essentially a matter of expanding and dividing the pie. The domestic medical market has passed the period of savage growth, and the importance of stimulating potential demand is increasing day by day.

The efficiency of high-end exploration in domestic healthcare is expected to significantly improve through the stimulation of non-public and foreign capital. If the domestic healthcare market can be further expanded successfully, all participants will benefit.