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China moves to shut out foreign medical equipment makers
Beijing pushes domestic agenda in market dominated by overseas companies
The Chinese government wants to build its own medical device industry. (Photo by Tomoko Wakasugi)
SHUNSUKE TABETA and TOMOKO WAKASUGI, Nikkei staff writersSeptember 14, 2022 18:00 JSTUpdated on September 14, 2022 19:37 JST
BEIJING/SHANGHAI -- China's move to ban overseas-made medical equipment is forcing multinational corporations to choose between leaving the market or handing over their core technologies.
Local governments in Hubei, Anhui, Shanxi provinces and the Ningxia Hui autonomous region issued notices in April to local hospitals to limit their use of medical and testing equipment to those produced domestically.
This is thought to have been in response to the central government's internal notice issued in May 2021 that listed 315 items -- including equipment for magnetic resonance imaging, computed tomography, X-rays, and endoscopes -- that it wanted hospitals to procure only from local producers.
"This will affect some of the products, such as the postponement of equipment purchases," said an official from Japanese testing equipment maker Sysmex. Another medical equipment maker said it had decided not to bid for any contracts.
Many local governments have been obeying that order. "Major hospitals in Beijing, Shanghai, Guangdong Province and other areas are also increasingly limiting their procurement to domestically produced products," said a person familiar with the matter.
Foreign companies dominate the Chinese medical equipment market with a share of 70% to 80% of CT and MRI sales through public bidding, according to local media. These companies make around 80% of high-performance models, according to those reports. The top three manufacturers are General Electric, Siemens and Philips.
China's medical equipment market is vast and only expected to expand in the future due to an aging population. Local media reported that turnover of China's medical equipment market is expected to double by 2025 from 2021's $140 billion, which was already close to that of the U.S. Sales of CTs and MRIs sales reached $3.5 billion and $2 billion per year respectively, from public bidding figures alone, according to Chinese media reports.