China Allows Wholly Foreign-Owned Hospitals

BEIJING (Reuters) – On Sunday, China announced that it would permit the establishment of wholly foreign-owned hospitals in nine regions, including the capital city, to attract foreign investment and stimulate its struggling economy.

A document released by China’s commerce ministry outlined this new policy as a pilot initiative stemming from a commitment made by the ruling Communist Party’s Central Committee, led by Xi Jinping, during its July plenum meeting, held approximately every five years.

The document stated: “In order to introduce foreign investment to promote the high-quality development of China’s medical-related fields and better meet the medical and health needs of the people, it is planned to carry out pilot work of expanding opening-up in the medical field.”

The pilot project will permit the establishment of foreign-owned hospitals in the following affluent cities and regions: Beijing, Tianjin, Shanghai, Nanjing, Suzhou, Fuzhou, Guangzhou, Shenzhen, and Hainan.

However, the new policy does not cover hospitals focused on traditional Chinese medicine or the merging and acquisition of public hospitals. Specific conditions, requirements, and procedures for creating these foreign-owned hospitals are expected to be outlined soon.

Additionally, the policy allows companies with foreign stakeholders to engage in the development and use of gene and human stem cell technologies for treatment and diagnosis within the pilot free-trade zones of Beijing, Shanghai, Guangdong, and Hainan. This includes processes such as registration, marketing, and nationwide product distribution.

The lifting of restrictions on foreign investment in these sectors comes at a time when China, the world’s second-largest economy, is facing increasing challenges, with declining foreign business sentiment contributing to growth concerns.