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1 General Introduction of China Medical Device Market China has the world s largest population. In 2002, it was officially estimated at 1,284.5 million. Healthcare provision is extremely uneven. It is best in the towns and cities. Public insurance schemes are gradually being introduced in the towns, and there are plans to extend this to rural areas. The Chinese device market is largely supplied by imports or products made locally by multinational joint ventures, especially at the higher end of the technology scale. Local companies are usually small and undercapitalized by Western standards. China Medical Device market is concentrated in the larger cities such as Beijing, Shanghai, Guangzhou and Tianjin. It is estimated that China currently has around 300 MRI units, 3000 CT scanners, 300 linear accelerators and 2,500 color ultrasonic B units. Ⅰ. Medical Device Imports Chinese imports of medical equipment & supplies have grown rapidly in recent year. In 2003, the total amount reaching US$2,187.8 million, placing China among the world s top 15 medical equipment importers. Growth in 2002 was and impressive 33.8% over the US$1,634.7 million in i. Imports by Category,2003 (%) Others 11.4% Electromedical 22.8% X-ray apparatus 27.9% Syringes, needles & catheters 7.5% Orthopaedic/ prosthetic 10.7% Therapy apparatus 6.2% Other medical/surgical equipment 13.5% ii. The leading suppliers, 2003 (%)
2 Others 14.7% USA 32.2% Other EU 11.0% Netherlands 3.2% France 3.3% Germany 17.1% Japan 18.5% Ⅱ. Medical Device Exports Chinese exports of medical equipment & supplies reaches US$1,821.1 million in 2003, which represented impressive growth of 32.0% over the US$1,379.5 million recorded in Much of China s exports are the result of joint ventures established by multinationals; as a result, product quality is usually very high. i. Exports by Category, 2003 (%) p prosthetic appliances 7.3% Others 9.6% Bandages & dressings 22.2% X-ray apparatus 10.7% Wheelchairs 6.6% Mechano-therapy apparatus 18.5% Syringes, needles & catheters Other 11.7% medical/surgical equipment 13 4% Major destination countries for exports are: USA (US$507.3m; 27.9%), Japan (US$366.7m; 20.1%), EU (US$342.9m; 18.8%) ii. Exports of Medical Equipment & Supplies, (US$000s)
3 Medical Supplies 251, , , , ,036 Medical X-ray Film 1,964 3,594 4,561 4,604 4,961 Surgical Gloves 10,207 10,266 12,589 14,965 36,564 Medical, Surgical Sterilisers 699 2,418 2,110 4,616 9,553 Wheelchairs 14,550 22,711 41,777 68, ,978 Contact Lenses 2,708 5,228 1,535 1,229 1,564 Medical Equipment 216, , , , ,386 Electromedical 26,773 20,198 28,105 49,751 84,476 Syringes, Needles & Catheters 75,757 99, , , ,310 Dental Instruments & Appliances 3,021 3,830 3,079 4,109 5,120 Ophthalmic Instruments & Appliances 1,375 2,776 3,384 6,488 6,999 Other Instruments & Appliances 109, , , , ,481 Therapy Apparatus 125, , , , ,745 Orthopaedic & Prosthetic Appliances 50,489 76,026 73,132 91, ,360 Medical X-ray, A, B, C Ray Equipment 24,638 89, , , ,010 Medical Furniture 4,212 7,258 8,496 15,301 25,933 Total 702, ,153 1,142,188 1,379,496 1,821,090 III. Projection: For 2005, Espicom estimates market growth to be in the region of 6.5% and it is expected that China, currently the tenth largest market in the world could breach the top five by Espicom predicts that by 2010, the market will reach US$3.5 billion, equivalent to around US$2.6 per capita, and will remain one of the lowest per capita totals in the world. i. Market Projections (US$ billion) Market Projections (US$ billions) Market Per capita (US$)
4 Total Market Projections, (US$ billions) ii. Projected Market by Category, (US$000s) Medical Supplies Medical X-ray Film Surgical Gloves Medical, Surgical Sterilisers Wheelchairs Contact Lenses Medical Equipment 1,258 1,339 1,426 1,519 1,618 1,723 Electromedical Equipment Syringes, Needles & Catheters Dental Instruments & Appliances Ophthalmic Instruments & Appliances Other Medical & Surgical Instruments Therapy Apparatus Orthopaedic & Prosthetic Appliances Medical X-ray, Alpha, Beta, Gamma Ray Equipment Medical Furniture Total 2,556 2,722 2,899 3,088 3,288 3,502 IV. Others i. SWOT Analysis of the Chinese Medical Device Market
5 Strengths Vast population of around 1.3 billion Rapid economic growth Comprehensive, if severely underfunded, basic health network Weaknesses Poor co-ordination and planning of health services Tiny per capita health expenditure Highly fragmented market, huge regional disparities in levels of provision Culture of official secrecy worsens public health problems such as HIV or SARS Opportunities Emergence of a relatively wealthy urban population in the major cities Expansion of health insurance services should gradually improve coverage Rising demand for private urban clinic/hospital facilities 2008 Olympics In Beijing should provide investment opportunities Revised registration process should simplify regulatory system for overseas investors Threats Many layers of bureaucracy, corruption is common Weak intellectual property enforcement Highly competitive domestic manufacturing sector for low-tech items Uncertain political stability? Growth in expenditure may lead to rising costs which would severely restrict any possibility of adequate universal coverage ii. Key National Data Projections Population (millions) 1,306 1,313 1,319 1,324 1,330 1,335 % Growth Number Aged 65+ (millions) % Aged GDP (US$ billions) 1,843 2,040 2,203 2,379 2,570 2,775 Per Capita (US$) 1,411 1,554 1,670 1,797 1,932 2,079 Real Growth Total Health Expenditure (US$ billions) Per capita (US$) % of GDP % Private Hospital Beds (000s) 3,004 3,020 3,034 3,045 3,059 3,071 % Private n/a n/a n/a n/a n/a n/a Rate/ Physicians (000s) 1,437 1,444 1,451 1,456 1,463 1,469 % Private n/a n/a n/a n/a n/a n/a Rate/ Source: Department of Health, IMF, Espicom Estimates
6 iii. International Market Projection The World s Top 50 Medical Device Markets, (US$ millions) 1 USA 75,267 79,906 84,832 90,061 95, ,507 2 Japan 17,819 18,354 18,904 19,471 20,055 20,657 3 Germany 10,433 10,843 11,268 11,711 12,170 12,648 4 France 6,550 6,779 7,017 7,262 7,516 7,779 5 UK 5,157 5,427 5,711 6,011 6,326 6,657 6 Italy 3,891 4,048 4,211 4,381 4,557 4,741 7 Canada 3,347 3,477 3,613 3,754 3,900 4,052 8 China 2,556 2,722 2,899 3,088 3,288 3,502 9 Brazil 2,503 2,505 2,508 2,510 2,513 2, Spain 2,218 2,314 2,413 2,517 2,625 2, Netherlands 1,810 1,927 2,052 2,185 2,327 2, Switzerland 1,779 1,861 1,947 2,037 2,131 2, Australia 1,769 1,847 1,928 2,013 2,101 2, Mexico 1,588 1,681 1,779 1,884 1,994 2, Sweden 1,517 1,584 1,654 1,726 1,802 1, Korea 1,455 1,512 1,571 1,632 1,696 1, India 1,318 1,380 1,444 1,511 1,581 1, Russia 1,283 1,371 1,466 1,567 1,675 1, Denmark 995 1,043 1,093 1,145 1,200 1, Belgium ,061 1,111 1,163 1, Austria ,007 1,022 1, Poland ,018 1,077 1, Turkey Taiwan Norway Greece Czech Republic South Africa Israel Saudi Arabia Finland Portugal Ireland Malaysia Argentina Hungary Thailand United Arab Emirates New Zealand Hong Kong Iran Romania Costa Rica Egypt Colombia Ukraine Croatia Singapore Chile Slovakia Source: Espicom World Medical Market Report 2005 Source: The Challenge of the Chinese Medical Device Market, Espicom Business Intelligence,
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