As a socialist nation, in the past, the Chinese biotech and medical sectors have been run inefficiently and some of the poor management practices are carried over today.
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In the past, Chinese patients did not have the freedom to vote with their feet and their money; the government simply dictated where patients could go to receive treatment and what kind of treatment they will receive.
Today, things have changed greatly and people are now able to choose where to spend their money on health care.
Chinese Medical Industry Statistics
- Pharmaceutical sales in China by the top 10 multinational pharmaceutical companies have been growing more than 15% a year since 1999.
- The Chinese pharmaceutical market is expected to pass the $25 billion a year mark by 2010.
- There is plenty of room for growth: while China accounts for 20% of the world's population, it only accounts for 1.5% of the pharmaceutical industry.
- Healthcare spending in China has been increasing at a rate of more than 13% a year since 1990, growing much faster than China's GDP.
- In 2005, China imported $12 billion dollars worth of medical products, up about 19% from 2004.
As you can see from the statistics, the Chinese pharmaceutical sector is truly full of opportunities for entrepreneurs.
Generally speaking, healthcare spending is elastic. This means that as people get wealthier, for every 1% increase in real income, people tend to increase their healthcare spending by more than 1%. China is no different from other nations in this respect. China's growing real per capita GDP combined with an aging population offers immense opportunities for entrepreneurs.
There are many elite hospitals in China catered to wealthy and powerful individuals as well as to wealthy expats. These hospitals are equipped with top-of-the-line imported medical equipment. Current demand for high-end modern equipment and supplies are supported by these elite hospitals. However, there is a general trend towards modernization of hospitals all across China, pushing demand for imported medical equipment even higher.
Although China is not currently known for medical tourism, like everything else in China, this is quickly changing as more and more people go to China to receive affordable treatments (both Western and Chinese treatments).
Entrepreneurs could seize this opportunity, for example, by setting up intermediary companies that specialize in connecting the dots in Chinese medical tourism as it inevitably booms.
If you are a talented entrepreneur, there are many opportunities for you to participate in the biotech/medical sectors in China. Use your imagination and ingenuity!