China’s medical device market surpasses world’s number one

(Health Korea News / Lee Chang-yong) It is predicted that the size of China’s medical device market this year will exceed 200 trillion won.

The Korea Trade-Investment Promotion Agency (KOTRA) released a report titled, “What is the potential of the Chinese market chosen by global medical device companies?” on the 25th, predicting that the Chinese medical device market, which was worth 1.0358 trillion yuan (196.4187 trillion won) last year, will grow 9.1% this year to reach 1.13 trillion yuan (214.2932 trillion won).

The Chinese medical device market has grown steadily over the past five years. The market size was 623.5 billion yuan (118.2405 trillion won) in 2019, and grew 17% to 729.8 billion yuan (138.3554 trillion won) the following year. After that, it grew 15.6% to 843.8 billion yuan (159.9929 trillion won) in 2021 and 11.4% to 940.1 billion yuan (178.2523 trillion won) in 2022. It is expected to reach 1.13 trillion yuan (214.1802 trillion won) this year. This is comparable to the size of the United States, the world’s largest market. Last year, the size of the U.S. medical device market was 180.22 billion dollars (239.4042 trillion won).

According to the report, the Chinese medical device market surpassed 200 trillion won thanks to the Chinese government’s policy of expanding the supply of domestically produced medical devices and advancing technology.

On August 3 last year, the Ministry of Industry and Information Technology and four other ministries announced the ‘New Industry Standardization Pilot Program Implementation Plan (2023-2035)’. It actively supports eight emerging industries and nine future industries. Medical equipment was included in the eight emerging businesses, and the implementation plan included a detailed fostering plan for medical equipment parts and solutions.

On August 28 of the same year, the Ministry of Finance, the State Administration of Commerce, and the State Administration of Taxation issued the “Notice on the Value-Added Tax Policy for Equipment Purchases by Research Institutions,” which stipulates that domestic and foreign research and development institutions will receive a full refund of value-added tax when purchasing equipment made in China. This is to promote domestic scientific research and technological research and development.

In addition, the Chinese government is also implementing a policy of reducing import tariffs on medical devices to reduce the financial burden on patients and meet China’s demand for advanced devices.

China’s Ministry of Finance has decided to apply provisional import tariffs on 13 products, including artificial teeth, spring coils, and artificial joints, for the second consecutive year.

(13 medical devices subject to provisional import tariffs in 2024, data: Ministry of Finance of China)

(* The marked items are within the scope of the HS Code, and the specific target is based on the detailed product name.)

A KOTRA official said, “For 12 of these items, the Korea-China FTA tariff rate is lower than the provisional import tariff rate,” and “Chinese buyers importing these 12 items from Korea should apply the Korea-China FTA tariff rate.”

Global medical device companies are also entering China and contributing to the market’s growth.

Currently, global companies such as GE Healthcare, Olympus, and Siemens are deciding to invest or build production plants in major cities in China.

Siemens signed an MOU with the Nanshan District Government of Shenzhen to invest approximately 1 billion yuan (189.62 billion won) to establish a high-tech medical equipment research and development manufacturing base in Nanshan District of Shenzhen. GE Healthcare signed an MOU with the Beijing Municipal Government on four cooperation measures, including expanding investment, fostering the industrial ecosystem, strengthening medical cooperation, and improving the talent cultivation environment.

Olympus has decided to establish its first medical device production and R&D base in China in Suzhou, the second location after Japan where it has decided to develop core products.

Philips began localizing in China more than 10 years ago. Currently, its precision diagnostic product line, including ultrasound and CT, is 100% produced in China. Philips’ sales in China account for 15% of Philips’ total sales.

Pentax also decided to establish an endoscope manufacturing, R&D and service center in Shanghai to provide faster and better endoscope solutions and services.

An exhibition that will provide insight into China’s medical device technology and market trends will be held next month.

This is the 90th China International Medical Equipment Fair (CMEF). This exhibition, which will be held in Shenzhen, China for four days from the 12th to the 15th of next month, is expected to have 4,000 companies participating in booths and 40,000 visitors.

Since its first event in Shenzhen in 1979, CMEF has established itself as Asia’s leading medical equipment exhibition. Global companies such as GE Healthcare, Siemens, and Philips participate in the event every year.

In an interview with KOTRA’s Shenzhen Trade Center, Company A, a Chinese medical device import buyer, said, “As the pace of domestic production of medical devices in China has been accelerating recently, the standards for verification are getting higher,” and advised, “In order for overseas products to enter the Chinese market, they must thoroughly follow related procedures such as quality verification and certification.”

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