The uncertainty and doubt about China include everything from geopolitical tensions and poor IPR protection to hidden protectionism, unfair competition, and complex registration procedures. However, it is essential that this is scrutinized on facts to ensure companies make well-informed business decisions about the Chinese market.

Otherwise, this will potentially cut off many startups from the opportunities in a major growth market for innovative medtech, healthtech, drugs, and rehabilitation equipment.

• In 2023, China’s medical device market reached a total sales value of RMB 950 billion (~USD 130 billion) with Compound Annual Growth Rate (CAGR) of 14% since 2015.
• In 2023, China’s pharmaceutical market generated a total sales value of RMB 2.8 trillion (~USD 390 billion) with CAGR of 10% since 2015.

The development of the Chinese healthcare market is mainly driven by some major demographic changes over the last 25 years such as rising prosperity, increasing urbanization, falling birth rates, and a rapidly aging population which is leading to a growing number of chronic diseases like cancer, diabetes, obesity, and mental health issues.

• In 2023, China’s birth rate was 9 million (6.4 per 1,000) compared with 16.9 million (12.1 per 1,000) in 2013. This compares to currently 9.2 per 1,000 in Switzerland.
• In 2023, the average life expectancy in China was 78.8 and projected to reach 81.3 by 2035. This compares to currently 84.25 years in Switzerland.
• In 2023, China’s population of 65 years+ was 212 million or 15.7% of the total and expected to reach 366 million (26%) by 2050. This compares to currently 19.6% in Switzerland.

As such, China faces the risk of “growing old before getting rich” but these profound changes also represent an attractive and fast-growing business opportunity for innovative Swiss startups interested in exploring, accessing, or expanding into the Chinese healthcare market.

To meet the rising demand for high-quality healthcare services, China continues to invest massively in medical R&D, digitization, AI, robotics, automation, tele-medicine, modern hospitals, innovative medical products, and new treatment methods.

This is evident in the “Healthy China 2030” blueprint and “Healthy China Action Plan (2019-2030)” that covers 15 key campaigns within health promotion and disease prevention with specific targets for e.g., obesity, mental health, cardiovascular & cerebrovascular diseases, oncology, diabetes, and rare diseases

Moreover, China’s current “14^th Five-year Plan (2021-2025)” presents a detailed plan for the development of the Chinese healthcare system focusing on building a strong public healthcare system, deepening the reform of the healthcare system, and improving the universal health insurance system.

• In 2023, China’s healthcare spending totaled RMB 9 trillion (~USD 1.25 trillion) or 7.2% of GDP compared to 11.8% in Switzerland, and 17.3% in the US.
• Total spending in China is projected to reach RMB 17 trillion (~USD 2.4 trillion) by 2030.
• In 2023, China’s total healthcare spending per capita (PPP) was USD 886 compared to USD 8,050 in Switzerland, and USD 12,800 in the US.

China’s continued growth in investment and R&D spending within healthcare and life science reflects the country’s high ambition to become a global player and leader within technological innovation in key areas like genetics, biotech, medtech, pharma, and AI.

In 2023, China spent a total of USD 458 billion or 2.7% of its GDP on R&D (8.1% annual growth) in which 10-15% was allocated to life sciences. This compares to a total of 3% in Switzerland and 3.4% in the US.

China’s focus on technological innovation is evident in the “Internet Plus Healthcare” plan from 2018 to promote healthcare services using Internet-based technologies and digital tools.

The plan highlights the application of mobile medical services in the Chinese healthcare system based on AI technologies and smart devices to achieve real-time health monitoring, assessment, disease warning, chronic disease screening, proactive intervention, and treatment.

In the plan, the application of AI medical image recognition software is mentioned as a specific area to improve the efficiency of medical services. In China, it is estimated that the number of radiologists is only increasing by 4% per year while the data volume of medical images is growing by over 30% per year.

As a result, global players such as GE Healthcare, Siemens Healthineers, and Philips Healthcare that dominate the high-end diagnostic MRI equipment market in China are facing increasing (international) competition from domestic players like Shanghai United Imaging Healthcare, Shenyang Neusoft Medical Systems, and Shenzhen Mindray Bio-Medical Electronics.

At the same time, China has built a world-class, high-tech production base, and supply chain that offers significantly lower production costs and speed-to-market compared to most other countries or regions.

By cooperating with local Chinese partners, startups could gain valuable insights and a competitive edge against their international and Chinese competitors. As such, China not only represents a (potential) growth market for innovative medical products and solutions but also an emerging hub for advanced health technology and life science innovation.

Recognizing and keeping track of these developments in China is essential for any foreign life science company to stay at the forefront of innovation and ahead of competition.

To support the advancement of the Chinese healthcare system and provide Chinese patients with the latest advanced medical opportunities, China has in recent years introduced several preferential policies to attract innovative foreign medical products that without an NMPA approval can be used by selected top Chinese hospitals in the provinces of Hainan and Guangdong close to Hong Kong.

Hainan Boao Lecheng International Medical Tourism Pilot Zone

On 28 February 2013, the establishment of the Hainan Boao Lecheng International Medical Tourism Pilot Zone (HBL) was approved in which the first hospitals opened in 2017-2018.

HBL is China’s only designated national medical zone that has been granted preferential policies and incentives to create a world-class international medical destination and cluster for advanced medical treatment, rehabilitation, R&D, and technological innovation in China.

When fully developed by 2035, HBL is planned to cover 20 km2 with a total of 3 km2 of constructed land. It will provide 12,000 hospital beds and employ 28,500 medical personnel.

All the currently 25 private hospitals and 3 public general hospitals at HBL, with another 10-15 planned, are designated Tier-3 hospitals which is the highest classification in China. Many are branches of leading Chinese hospitals in for instance Shanghai, Beijing, and Chengdu.

HBL offers a special fast-track approval that makes it easier and quicker to sell, import, and use “Innovative” medical devices and drugs in need by the hospitals at HBL without an NMPA approval for mainland China.

Main Criteria: 1) Product cannot have been approved in mainland China but needs CE/FDA/PMDA approval, 2) Product shall be “innovative” and cannot be replaced by an already approved predicate in China, and 3) Product shall be used for a specific medical purpose at a designated HBL hospital.

Please note that the fast-track approval process can only begin when a sales agreement has been signed with one of the hospitals, but the approval will apply to all the hospitals at HBL.

After the application has been submitted to the Hainan health authorities, the review and approval process only takes ten (10) working days. No official (registration) fees apply.

This compares to an expected registration time frame of 18 months for Class II products and 22 months for Class III products excluding clinical trials of twelve (12) months to obtain an NMPA approval for mainland China.

As such, HBL is targeting innovative medical products that have already been approved in Europe, the US, or Japan which opens the doors for Swiss life science SMEs to obtain a possible fast-track approval. HBL thus functions as a viable testing area and stepping-stone to the whole Chinese healthcare market.

As of 1 January 2025, 280 medical devices and 170 drugs have been approved for exclusive use at HBL. Medical products from Swiss companies like Ayus Medical Group, Dividat, Idiag, Neurolite, Novartis, Roche, and Hocoma have all obtained fast-track approvals at HBL.

HBL is also the first place in China that allows Real-World Data studies of the use of medical products with a fast-track approval that can supplement the application for the NMPA registration and that way accelerate the approval process to sell in all of mainland China.​ This policy is mostly used by larger foreign medical device and drug companies already present in China.

As of November 2024, 40 licensed medical devices and drugs have been included in the RWD Program in which 12 medical devices and 5 drugs have so far obtained an NMPA approval via RWD studies at HBL.

One example is the Class III bone regeneration product Smartbone^® ORTHO from the Swiss company Industrie Biomediche Insubri SA that on 29 July 2023 received a fast-track approval and on 13 February 2025 received an NMPA approval whereby the whole process only took 18 months.

Guangdong-Hong Kong-Macao Great Bay Area (GBA)

The GBA is a designated geographical and economically integrated area that includes Hong Kong, Macao and the nine mainland cities of Dongguan, Foshan, Guangzhou, Jiangmen, Huizhou, Shenzhen, Zhaoqing, Zhongshan, and Zhuhai in Guangdong Province.

Since August 2021, the GBA has offered a fast-track approval procedure that makes it easier and quicker to register, sell, import, and use medical devices and drugs in need by the currently 45 designated GBA hospitals without an NMPA approval for mainland China.

Main Criteria: 1) Product cannot be replaced by a similarly approved product in mainland China,
2) Product needs HK or Macao registration, 3) Product needs to have been procured and used by a public hospital in HK or Macao, and 4) Product shall be used for a specific medical purpose at a designated GBA hospital.

Please note that the fast-track approval process can only begin when a sales agreement has been signed with one of the designated hospitals, but the approval will apply to all the designated GBA hospitals.

As such, GBA is mainly targeting existing medical products that have already been registered and used by a public hospital in Hong Kong or Macao which excludes most Swiss life science SMEs and thus limits their opportunities for a possible fast-track approval at the GBA.

As of October 2024, 40 medical devices and 39 drugs have been approved for exclusive use at the GBA.

Untapped Market Opportunities in China

Despite the great market potential, accessing and doing business in China can for many Swiss life science SMEs be a daunting task .

However, these worries and doubts can be reduced or overcome with the support of Swissnex in China and by cooperating with local service providers and partners like NLSP that understand how to navigate and provide a more safe, efficient, and easier access to the Chinese healthcare market.

As such, both HBL and GBA can serve as important gateways and stepping-stones to the mainland China market no matter if the aim is to gain initial market access and experience and/or to conduct a RWD study to accelerate the NMPA registration process and sell in all of mainland China.

These preferential policies and opportunities at HBL and GBA represent a unique window of opportunity for Swiss life science SMEs to access and sell directly to leading hospitals in China that can serve as indirect Key Opinion Leaders towards patients from mainland China.

At the same time, it gives foreign startups the opportunity to create awareness and interest about their company and products to Chinese distributors present at HBL and GBA which can open the doors to untapped market opportunities in the rest of the Chinese healthcare market.

Article last updated February 25, 2025

Disclaimer: All the included information and data are provided in good faith, and the author makes no representation or warranty of any kind, express or implied, regarding the accuracy, adequacy, validity, reliability, availability, or completeness of any information and suggestions.