China Plans to Permit Wholly Foreign-Owned Hospitals in Select Areas, Says Reuters

BEIJING (Reuters) – China announced on Sunday its decision to permit the creation of wholly foreign-owned hospitals in nine regions across the country, including the capital. This initiative is part of Beijing’s efforts to attract additional foreign investment to stimulate its slowing economy.

According to a document released by China’s commerce ministry, this new policy functions as a pilot project aimed at fulfilling a commitment made by the ruling Communist Party’s Central Committee, led by Xi Jinping, during its July plenary meeting, which is 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 establishment of these hospitals will be allowed in several affluent cities and provinces, specifically Beijing, Tianjin, Shanghai, Nanjing, Suzhou, Fuzhou, Guangzhou, Shenzhen, and Hainan.

Notably, the new policy excludes hospitals that practice traditional Chinese medicine and does not apply to "mergers and acquisitions of public hospitals.” It also indicated that further details regarding the specific conditions, requirements, and procedures for setting up these foreign-owned hospitals will be provided soon.

Additionally, the policy enables companies with foreign investors to participate in the development and application of gene and human stem cell technologies for medical treatment and diagnosis within the pilot free-trade zones of Beijing, Shanghai, Guangdong, and Hainan.

This policy includes provisions for the registration, marketing, and nationwide sale of related products. The easing of restrictions on foreign investment in these sectors comes as China’s economy, the second largest in the world, deals with increasing challenges, including declining foreign business sentiment, which poses a risk to its growth.