China’s “New Booming Industries”

China has become one of the largest healthcare markets in the world but healthcare spending still only accounts for approximately 5.5% of the country’s GDP. With a growing consciousness among the population regarding health and healthcare, the Chinese government has issued a series of policies aimed at reforming the national healthcare system and establishing a safer and more stable system. On one hand China’s government encourages private capital investment into the so far mostly state-owned and operated healthcare industry. This has resulted in a steady growth in foreign invested, private hospitals that offer high quality services, a comfortable environment and more innovative approaches, when compared to public clinics.On the other hand, it also encourages local production of pharmaceutical products which poses a challenge for global players. Large multinational pharmaceutical companies have hence joint forces with local companies not only in production but also in R&D efforts to ensure faster product launches, easier product registration processes, lower costs, as well as more targeted products.

In this edition of German Chamber Ticker, we will explore how other, seemingly “new” industries have recently become big pillars in the Chinese economy and what that might mean for society in general. We will also shed light on the growing pharmaceutical industry in China and the steps large multinational players in the industry have been taking to ensure their continued success in the country. Last but not least, we will take a closer look at the successes and fallbacks of digitalization in the healthcare industry and what the future of the industry could mean for tech companies. We hope you enjoy reading!

Yours sincerely,

Stefan Rosenbohm


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Cover Story 1 - A Place on the Global Field

The Emerging Sports Industry in China

While only three to five years ago, many people would still question, if not laugh at, the idea that sport would be a serious industry in China. Today, they are much less likely to do so. Indeed, the past several years have witnessed massive investment into the sport industry in China. It is reported that Chinese mergers and acquisitions in domestic and overseas sports markets have seen exponential growth since 2015, when it spent almost RMB 40 billion (around USD 5.99 billion) in total investments was spent, with 33 deals valuing over RMB 10 million (around USD 1.50 million)...More

Cover Story 2 - Healthcare in China

Huge Market, Strong R&D


Driven by economic growth, 20 years of urbanization, and an increasing aging population, China has become one of the largest healthcare markets in the world. Data released by the Chinese Academy of Medical Sciences show that healthcare spending in China reached EUR 554 billion in 2016, accounting for 5.66% of GDP in comparison with a high-income country average of 7.7%. It is expected that the health expenditure will reach EUR 882 billion by 2020, according to National Health and Family Planning Commission (NHFPC), China. Considering the increasing R&D capabilities and improving framework conditions for science, technology and innovation (STI), China is not just a huge market for healthcare business, but also a strong partner for R&D activities...More

Cover Story 3 - Dissecting Digital Health

Redefining the Value of E-Health 


The State of Healthcare in China

The most recent estimation of China’s healthcare expenditures amounted to a mere 5.4% of GDP, in contrast with 17.1% in the USA. Based on this fact and the sheer size of the Chinese population, one could argue that this is one of the most efficient healthcare systems in the world. More specifically, China has a chronic disease patient population exceeding 300 million. The immense amount of pharmaceutical prescriptions and frequent hospital visits means huge patient throughput, which also results in significant pressure on China's healthcare system...More

Cover Story 4 - Healthcare Reform in a New Era

Challenges for MPCs and How to Overcome Them


The pharmaceutical industry, by China's 13th Five Year Plan, is considered to be a pillar industry that will fuel economic growth in the future. It is expected to maintain medium to high growth rates due to increasing medical demand. At the same time, with a  lower growing domestic economy and deep reforms into China's social protection system, Beijing has been focused on medical cost control through a policy mix that includes tendering and medical insurance, which encourages usage of cheaper domestically-produced drugs over higher-priced imported ones. As a result, multinational pharmaceutical companies (MPCs) will face a more challenging environment going forward, described in greater detail hereafter...More

Cover Story 5 - Going with the Change, Getting Ahead of the Wave

Interview with Steve Vermant about Life Sciences in China and What to Expect of the Industry’s Future 


The German Chamber Ticker team had the opportunity to talk to Mr. Steve Vermant Managing Director & Head of Research & Applied Solutions, Merck Life Science, China. Mr. Vermant has over 20 years of global experience in life sciences and talked about where China will be headed to in this industry...More

In the Spotlight - Be Global, Be Local, and Be Open

Interview with Dr. Peter Mertens, Head of Research, Siemens Corporate Technology China 


As a highly innovative company, Siemens aims to be a pioneer in technology development. For decades, Siemens has been increasing R&D investments in China. Meanwhile, China has become one of the most important R&D bases for the company. By fiscal year 2016, Siemens had over 4,500 R&D researchers and engineers, 20 R&D hubs and more than 11,000 active patents and patent applications in China. Siemens has become an integral part of the Chinese economy and is partnering with the country to address its pursuit of sustainable development. To further strengthen its power of innovation, Siemens is planning to increase its global investments in R&D in fiscal 2017 by some EUR 300 million to around EUR 5 billion...More

Features 1 - Hospitals in China

The Next Sector for Foreign Investors?


According to media reports, on 23rd May 2017, the German-based hospital group Artemed Group signed a customized lease agreement with Waigaoqiao Group in China (Shanghai) Pilot Free Trade Zone (“Shanghai FTZ”). Artemed Group plans to establish a multi-specialty hospital in Shanghai FTZ. Waigaoqiao Group has agreed to construct buildings for the hospital according to Artemed Group’s requirements. The signature of this agreement signifies a significant step forward regarding the realization of foreign invested hospital projects in China. And draws attention of foreign investors to foreign invested hospitals in China again...More

Features 2 - CS LAW and its Implementation

What Companies Should Know 


Labor law in China is complex and younger Chinese employees are more outspoken towards their employers than their older counterparts. These factors together bring many challenges for employers. This is one of the main reasons the number of labor dispute cases have increased over the last decade.Complex situations require sophisticated professionals. However, HR in China is still in its early stage and the main issue is that many HR professionals make mistakes in handling disagreements arising between employer and employees.This problem can be easily handled by optimizing daily HR management processes...More

Features 3 - Getting Accustomed to Customs

Risks in Pricing Practice 


Ever since 11th December 2002 when China became a WTO member, pricing has been an increasing focus of customs authority to check while China decreased tariff rate per WTO commitment. This particularly applies to import price of traded commodities between related parties and non-trade payment such as royalties or service fees, if they are to certain extent related to import goods. In case the import price declared is out of the range of import price index based on customs’ authority’s databank or if there is certain link between imported goods and non-trade payment, the customs authority will conduct import price adjustment so that additional import duty and import VAT will be levied. The additionally levied import duty becomes costs of import enterprise...More

More than Business - Second “More than a Market Awards” Honor Corporate Social Engagement Projects

How can German companies in China give back to the society in which they are operating? How can they create a positive impact in their communities and Chinese society at large? German companies in China are exploring manifold ways to do good. Between October 2016 and 28th February 2017, German companies with operations in Mainland China submitted an impressive total of 75 applications for this year ́s More than a Market Awards. On 15th June 2017, the German Chamber of Commerce in China, together with Bertelsmann Stiftung and supported by the German Consulate General Shanghai awarded the More than a Market Awards to seven projects to honor German companies' outstanding social engagement in Chinese society. The Gala was again hosted by Ms. Bettina Schoen, chairwoman of the board of the German Chamber of Commerce in China | Shanghai...More

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Olivia Helvadjian

Senior Communications Manager & Chief Editor

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