Last April, Yanzhong Huang, Professor at the School of Diplomacy and International Relations at Seton Hall University, appeared before the U.S China Economic and Security Review Commission to discuss China’s 13th Five year Plan as it relates to China’s present and future healthcare system.
Speaking before the Commission, Huang pointed out that five trends in China’s health sector are going to sustain robust growth in China’s healthcare market and at the same time, create opportunities for U.S pharmaceutical companies, hospital groups, and insurance companies.
The first trend in China but also in other countries, is the rising burden on Non-Communicable Diseases (NCD) such as cancer, cardiovascular diseases, and diabetes. Currently more than 85 percent of the mortality in the country is attributed to NCDs.
The World Bank reports that if effective measures are not adopted, the burden of NCDs in China could increase by at least 40 percent by 2030 and are expected to drive up outpatient visits, hospitalizations, and overall medical spending.
Another trend is the demographic shift since the Chinese population is aging very rapidly. In the middle of the century, the population over 65 years is expected to reach 25 percent. Population aging has led to the growth of a new market such as senior care.
The number of elderly people who are able to afford senior housing will reach 22 million by 2020. China’s five year plan will need to include improvements in their senior care system by providing more senior services and consumer health products,
The third trend is rapid urbanization which has led to the demand for more effective healthcare for migrant workers. Rapid urbanization in combination with policy changes to allow migrant workers to be reimbursed for healthcare costs will continue to generate more demand for healthcare.
Due also to urbanization, there will be more demand to meet the needs of the country’s well-to- do population. This means there will be an increasing demand for private hospitals, high tech medical devices, patented drugs, and commercial health insurers to cater to the wealthy and their needs. .
The fourth trend relates to the widespread use of information technology with the potential to revolutionize healthcare, drug development, and distribution. A growing consensus in China is that mobile health technologies provide a cost-effective solution to reaching out to the population in the rural and/or remote areas. Today, The Big Three Chinese Internet and E Commerce Companies (Baidu, Alibaba, and Tencent) are competing to invest in the healthcare industry.
Finally, healthcare reform in China is encouraging foreign and private investment in the healthcare sector by relaxing restrictions on market entry and encouraging private overseas investment of capital in the biomedical, hospital, and pharmaceutical industries.
China’s 13th Five Year Plan suggests that the government will continue to focus on developing the country’s biomedical industry and welcomes private and foreign investment in pharmaceutical R&D.