Healthcare players urged to expand in China as local growth slows

Their strict regulations are finally easing.

According to a report by OCBC, China’s healthcare sector may be fertile ground for investment.

The Chinese government has been easing the strict regulatory process for foreign investment in the healthcare sector, and has set a goal for private hospital services to increase contribution to the overall sector.

Further, the Chinese healthcare sector is also bolstered by substantial government spending, rising consumer wealth, as well as an aging population.

As quality of care and long waiting time are significant issues for public healthcare providers, private players can easily grab growth opportunities with their strong international branding.

Already, deals within the sector–including private hospital development projects–have been rising.

In May 2015, Raffles Medical Group clinched a joint venture with Shanghai LuJiaZui Group to develop a 400-bed international general hospital in Shanghai’s Pudong Area by 2018.

Other private players, such as Ramsay Health Care and International Healthcare Berhad (IHH), have announced expansion plans in other Chinese cities as well. IHH already inked a lease arrangement to operate a 350-bed hospital scheduled to open in 2017 at the Perennial International Health and Medical Hub in Chengdu.

Outside of hotel operators, healthcare service providers like Q&M Dental are also looking to expand in China. As of November 2015, Q&M Dental had seven dental establishments in China, and had proposed a spin-off dental supplies manufacturing business on the New Third Board.