Future Remains Bright

Most international medical markets can remain afloat on turbulent economic waters. Compared to developed countries, China’s industry mix of medical device and pharmaceuticals has not reached its critical juncture.

In markets such as the United States, Japan and Europe, the ratio of product value for the medical device and the product value of pharmaceutical industries is 1:1.9. This ratio in China is only 1:5, which means more medical devices are needed to supply the healthcare demand, signaling a tremendous growth potential for the Chinese medical market.

In the next five years, lower-tier markets will definitely draw a lot of attention, mainly due to heavy investment by the government and the universal healthcare insurance program.

Governmental spending on healthcare has increased to more than 20 percent of total spending in recent years. Government investment will encourage private investors to jump into the new market for healthcare systems, boosting the total investment and market potential.

China is expected to surpass Japan to become the second-largest medical market in the world in a few years. By 2010, China’s total product value of medical devices is expected to reach $14.7 billion, taking 5 percent of market share worldwide. By 2050, China is expected to contribute 25 percent of global medical device production.

So, it is safe to say that the Chinese medical market will survive the economic tsunami. But like most industries in China, the medical industry still needs to adjust to the changing political and social policies imposed by the central government and to the new market environment in order to be successful in the long run.