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 China will speed up the development of its medical device industry
and promote wider use of local products to "effectively control
unreasonable increases in the cost of medical care and reduce the
burden on patients," the country's health ministry said in a
statement posted on its website on Monday.
The overt backing by Beijing for homegrown medical devices will
raise protectionism concerns and is a headache for the global
companies attracted to China by annual growth rates McKinsey & Co
expect at around 20 percent over the next few years.
Global medical device makers, especially from the United States,
Europe and Japan, now dominate around three-quarters of China's
medical device market, which was worth 212 billion yuan ($34.51
billion) last year, according to figures from the Hong Kong Trade
and Development Council (HKTDC).
"We want to strongly advocate health ministry organizations to use
domestically-made medical devices, especially pushing top level
class III hospitals to use domestically-made products," the
statement said, citing Li Bin, the head of China's National Health
and Family Planning Commission.
Li was speaking at a medical device conference in Beijing to promote
the domestic sector, the statement said.
A number of recent investigations by Chinese authorities into
foreign firms like Microsoft Corp and car companies including Audi
AG and Chrysler have sparked concerns that Beijing may be using
legal muscle to support domestic firms at the expense of foreign
companies.
China's foreign direct investment inflows in January-July fell for
the first time in 17 months compared with the same period a year
earlier, although Chinese officials stressed it was not linked to a
spate of recent probes into foreign firms for alleged monopolistic
behavior.
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Miao Wei, the head of China's Ministry of Industry and Information
Technology (MIIT), said in the same statement that China needed to
raise the level and quality of its homegrown medical devices and
create incentives for medical institutions to use locally-made
products.
The fast growth of China's medical devices market has drawn in firms
including Siemens AG, General Electric Co, Koninklijke Philips NV,
Johnson & Johnson and Medtronic Inc. These compete with local
companies such as Mindray Medical International Ltdand China
Resources Wandong Medical Equipment Co Ltd.
Hospitals are the biggest distribution channel for medical devices,
accounting for almost 80 percent of the market, according to HKTDC
figures. There were around 13,400 public hospitals in China last
year, and a further 11,300 private hospitals, according to a June
report from Deutsche Bank.
(Reporting by Adam Jourdan; Editing by Matt Driskill)
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