what's new
This joint circular significantly eases China's restrictive policies on foreign investment in the medical sector, and aims to promote the registration, sale, and production of related products, and once registered and approved, it can be used nationwide. become available for use.
There are two main contents of the joint circular, in which China announced that it would allow the following:
Fully foreign-funded hospitals will be established in several major cities, including Beijing and Shanghai. Foreign-invested enterprises will be engaged in biotechnology, especially providing human stem cell and gene therapy services in the pilot free trade zone. These pilot programs underline the region's intention to bring back foreign investment and stabilize growth.
The Chinese government's move comes as the country's leadership pledged to further open up its markets at a major policy-making Third Plenum, and Vice Premier He Lifeng pledged to expand international cooperation and build a new open high-level economic system. This took place less than two months after the vows were sworn in. The China International Investment and Trade Fair, held in the southeastern city of Xiamen, announced that foreign investment is “an important part of China's economy and an important force in China's modernization drive.”
1) Significance of establishing a foreign-affiliated hospital
Although China piloted fully foreign-owned hospitals in 2014, foreign capital has historically been limited to joint ventures in established hospitals rather than sole ownership.
As a result of the joint notification, the restriction that foreign investors can only operate medical institutions in joint ventures has been relaxed, allowing them to open wholly foreign-funded hospitals in the cities of Beijing, Tianjin, Shanghai, Nanjing, Suzhou and Fuzhou. , Guangzhou and Shenzhen, and also in the southern island province of Hainan.
Commenters said the joint document issued by the three departments was broader in scope than in the past, and the term “wholly foreign ownership” was seen as a landmark change, allowing more healthcare institutions to benefit from foreign-funded healthcare. points out that it is possible. resource. Fully foreign-owned hospitals are now poised to introduce international medical technology, human resources, nursing models, service concepts and management practices, making them an area of focus for foreign investors around the world. .
This joint circular not only supports China's further opening up to foreign investment, but also promotes the thorough implementation of the Healthy China Strategy. This joint circular provides China with the opportunity to:
China's domestic demand for medical services may lead to further bans being lifted beyond the pilot areas in the future, thus creating a more flexible, agile and efficient medical service system. Improve the overall level of medical care, improve the medical environment, and provide convenience for foreigners receiving medical care in China.
Detailed requirements and procedures for fully foreign-owned hospitals and foreign ownership themselves have not yet been announced. However, it is already known that foreign investors are not allowed to buy public hospitals or operate businesses related to Chinese medicine.
Although the joint circular is silent on the content of the regulations, previous regulations on the Shanghai Free Trade Zone pilot indicate that future guidelines will include provisions regarding the total investment amount and the level of medical technology required. It has been shown that it may be included.
Furthermore, because medical data and other national information are involved, fully foreign-owned hospitals may face different regulations in areas such as prior authorization and medical services. Investors should closely monitor the development and implementation of regulations for wholly foreign-owned hospitals, particularly issues related to national treatment, regulatory models, and the free flow of foreign capital.
2) Significance in the development and application of biotechnology
China's negative list has explicitly prohibited “foreign investment in the development and application of human stem cells, genetic diagnostics, and therapeutic technologies” since 2007. The issuance of the Joint Circular allows foreign investing entities to engage in these activities within the scope of free trade. Zones in Beijing, Shanghai, Guangdong, and Hainan Free Trade Port for registration, market authorization, and manufacturing purposes. If approved, these products would be available nationwide.
Relaxing restrictions on foreign investment in the development and application of stem cell and genetic diagnostic and therapeutic technologies must be balanced with ensuring China's biosecurity, which has been a long-standing demand and effort within the industry. Therefore, foreign-invested enterprises participating in the pilot program must be aware of and comply with relevant Chinese laws and regulations. This includes regulations regarding human genetic resource management, clinical trials of medicines, registration and listing of medicines, production of medicines, and ethical review. Foreign investment entities must also ensure that the necessary administrative procedures are followed.
Furthermore, foreign investors are aware that while the Chinese healthcare market is continuously growing and dynamic, making it one of the most attractive markets in the world, it is also highly regulated, with high compliance requirements and intense We need to recognize the fact that competition exists. For foreign investors to benefit from the opportunities presented by joint circulars and successfully enter the market, they must understand and stay current with changes in relevant industry policies and compliance requirements and have a well-coordinated strategy. It is important to formulate
