Medical Industry in China

New Demands in Healthcare

In 2006, the World Health Organization found that cancer was the third highest cause of death globally.  10.9 million new cases of cancer are diagnosed each year, one-fifth of which are diagnosed in China.  Out of the 10.9 million diagnosed cases of cancer, it is reported that 1.5 million will die.

In 1957, cancer was the cause of 5% of China’s deaths, making it the seventh major cause of death.  By contrast, it is now the cause of 24% of deaths, making it the single greatest cause of death in China. 

The number of cancer victims in China is expected to rise due to the increase in its aging population.  This exponential growth will be accelerated by the decrease of infectious diseases and the increase in smoking, pollution, and carcinogens found in food.  An estimated 300 million men are smoking in China, equal to the entire U.S. population.

China's Growing Heathcare Expenditure

China is currently ranked seventh in terms of total healthcare expenditure, but it is widely believed that within the next twenty years, the size of China’s healthcare market will rival that of the US and Japan.  Between 1980 and 2004, China’s healthcare expenditure grew at a CAGR of 17%.  During the same period, healthcare expenditure increased from 3.2% to 5.7% of China’s GDP. 

Although China’s per capita health expenditure is only US$73, it has the highest per capita basis growth rate at 11.1%.   Rapid economic progress has made many people across the country wealthier.  In major cities and the more affluent coastal areas there are rising expectations for medical services.  Experts estimate that healthcare spending in these regions has been growing faster than the GDP.

China’s existing medical industry is lagging far behind the growing demand for healthcare.  The number of hospitals available and the quality of their equipment is still found wanting compared to other major countries. 

The government is responding to these problems by encouraging private enterprises to invest in the healthcare industry. China Renji is answering that call by reinvigorating state-run hospitals with an injection of private capital.