An attractive opportunity for Western corporations

In fact, as Shobert recalled, «it’s no surprise that in 2012 Us ambassador to China Gary Locke focused one of his trade missions on connecting American hospital operators, architects, and builders with Chinese partners. Once up and running, these new healthcare facilities will create new outlets for American medical companies to place their products and services, provided the industry is able to cost-effectively sell into the rapidly expanding domestic Chinese healthcare market». Besides that the Chinese pharmaceutical and healthcare scenario is poised to expand because of an ageing population, where the elderly will represent the 19% of its 1.41 billion inhabitants by 2020. A rising standard of living and bad nutritional habits imported from the Western world, together with some 350 million smokers in the whole country and the alarming conditions of air and water pollution, are also presumed to boost the phenomenon of chronic diseases and, according to Global Data, «spark an increasing demand for treatment». While diabetes and cardiovascular diseases are on the rise, analysts also expect a dramatic increase in the demand for medical devices. These technologies are crucial for the Chinese market, the largest in the entire Asia just behind Japan, which is expected to rocket up from the 20 billion dollars revenue it posted in 2012 to the peak of 54 billion dollars by the end of 2020, being this year at least 25.7 billion dollars worth, according to sources. Benjamin Shobert believes the global investment in the Chinese healthcare arena could total some 1 trillion dollars in seven years while other analysts such as Clearstate, an Economist Intelligence Unit, focused on the astonishing value of the merger and acquisition strategies which are nowadays under way and could allow many multi-national companies to gain competitive advantage underneath the Great Wall. «Of note are several merger and acquisition transactions with a value exceeding 10 million Us dollars taking place between May 2012 and January 2013 between medtech players in China. Aside from M&A deals, we also observe corporations pursuing more organic route by off-shoring their research and development and operations in China. Both routes to market leverage local knowledge, connections and consumer base to strengthen the companies’ market presence», Clearstate wrote in the introduction to its Asian healthcare titans 2013 report.