I am the director of a medical device company in the U.S. and I am looking to further expand and invest in China. What is the most viable way to go about doing this given the current industry climate?

There are a few options for you when looking to invest in the medical device industry. China is currently one of the world’s most promising markets for medical devices. China relies heavily on foreign imports for its medical supplies and devices, this is especially true for high-tech, high- price items, for which the U.S. serves as a major exporter. However the imports of mid-to-high end products have decreased in recent years, due to foreign companies moving their production plants to China. This is commonly attributed to the high entry barriers for the higher- end medical device market. Therefore faced with lack of financing, many firms are unable or unwilling to make investments necessary for moving into the higher ranges of the market.

The China National Health and Family Planning Commission have recently announced the launch of a policy favoring local producers of medical device, as it means bringing down health care costs. In this light, the latest trends in Chinese state policy for the medical device industry may dissuade foreign investors from a purely distribution- based approach.