China opens up medical sector, manufacturing to foreign ownership in growth push
Overseas investors can run hospitals in major cities while pared down ‘negative list’ lifts curbs on foreign access to manufacturing sector
A joint circular on Sunday from the Ministry of Commerce, National Health Commission and the National Medical Products Administration said foreign investors would be allowed to run hospitals in the cities of Beijing, Tianjin, Shanghai, Nanjing, Suzhou, Fuzhou, Guangzhou and Shenzhen, as well as in the southern island province of Hainan.
However, they will not be allowed to acquire public hospitals or run businesses relating to traditional Chinese medicine, according to the circular. The detailed requirements and procedures will be released later, it added.
The biotechnology sector will also be further opened up to foreign investment in major free trade zones of Beijing, Shanghai, and the southern provinces of Guangdong province and Hainan.
Effective immediately, foreign-funded firms will be allowed to research and adapt human stem cell and gene diagnosis technology, and offer related treatment services. They can also apply for market registration and mass production licenses that would apply nationwide.
The move from Beijing comes less than two months after the top Communist Party leadership at their key policymaking third plenum pledged to further open up the market.
It also came as Vice-Premier He Lifeng vowed to expand international cooperation and build a new open high-level economic system.
“Foreign investment is an important part of China’s economy and an important force in China’s modernisation drive,” he told the China International Fair for Investment and Trade in the southeastern city of Xiamen on Sunday.
Opening up the medical sector is the latest effort from Beijing to stem the decline in foreign investment amid a domestic slowdown and decoupling measures by the United States.
All restrictions on foreign access to China’s manufacturing sector will also be lifted from November 1, under the latest “negative list” – a document identifying sectors closed to foreign and private participation.
In August last year, Beijing issued a set of guidelines in a bid to increase foreign investment amid sluggish post-Covid economic recovery.
However, January-July foreign direct investment plunged by nearly 30 per cent year on year to 539.5 billion yuan (US$76.1 billion), government data showed.
According to data released by Vice-Premier He in Xiamen, China had nearly 1.18 million foreign-invested enterprises at the end of 2023, with a cumulative investment of 28.4 trillion yuan.
“We sincerely welcome foreign-funded enterprises to seize the favourable opportunity, make long-term plans in China, and continue to produce more beautiful report cards,” He said, as he sought to highlight the bright prospects for China’s economy and its market potential.
The “negative list” released on Sunday by the National Development and Reform Commission, China’s top economic planner, and the Ministry of Commerce also cuts sectors barred from foreign investment from 31 to 29. The list was last updated in 2021.
Foreign investment in manufacturing reached 154.48 billion yuan in the first seven months this year, a rise of about 3 per cent year on year.
The updated negative list further removes foreign ownership restrictions on cloud services and other value-added telecoms services provided within domestic pilot zones, particularly in key regions like Beijing, Shanghai, Shenzhen and Hainan.
This includes internet data centres, content delivery networks, and internet service providers.