The Race to Rural China: Tapping into the $125 Billion Health Care Budget

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The Race to Rural China: Tapping into the $125 Billion Health Care Budget

Sarai Tsai | March 15, 2010 - Leave a Comment

Companies	General Electric Healthcare Siemens Philips Healthcare Roche Diagnostics Novartis AstraZeneca
Industries	Medical Equipment Pharmaceutical

If you’ve ever wondered when to enter the Chinese health care market, a 3-year, $125 billion budget by the Chinese government indicates that the time is now. Analysts expect the medical equipment market to grow an average of 13.5% a year to $15.5 billion in 2012. And thanks partially to a preliminary list of 307 drugs that must be stocked in all hospitals and clinics, the pharma market is expected to reach $110 billion by 2015.

Although urban areas are a big draw, it’s the rural areas, where millions have inadequate health care, that hold the greatest potential. The Chinese government plans for 31,000 new hospitals, mostly in rural locations, to be built by 2012.

Discover which major players are vying for rural market share after the break.

According to the CEO of GE Healthcare China, Marcelo Mosci, the creation of new hospitals is “a good opportunity to upgrade technologies so they can treat more complex diseases.” Although currently rural markets comprise less than 10% of GE’s China sales, they have grown twice as fast as its overall business in China (which has had double digit growth four years straight).

GE is not alone – Siemens Healthcare, Philips, Roche, Novartis, and AstraZeneca, along with several Chinese-based health companies are all vying for market share. Does this mean small firms can’t break into the market? Not necessarily. Rural areas may not be able to handle or maintain large medical equipment that currently dominates the market. The need for small, portable and locally sustainable technology is still needed.

Source: Business Week