China throws open health sector to foreign direct investment

China has thrown open its health sector to foreign direct investment, inviting hospitals abroad to open their branches in the country, apparently to meet growing demand for medicare in the world's most populous nation.

In its new policy, Chinese government said the health sector would be opened not only for private sector but also for investment abroad to meet the increasingly diversified demands on health care.

The official guidelines carried by the state-run media said that overseas investments are now welcome to sponsor hospitals, while the procedures will be further simplified.

The central government or the State Council asked the local governments to amend their documents accordingly and get rid of any policies that impede the development of non-governmental medical institutions.

Also, the new policies encourage social funds to take part in governmental hospital reforms and convert some government-backed hospitals into non-governmental institutions to reduce the ratio of public hospitals, official Xinhua news agency reported.

China will deepen the opening-up of medical institutions and turn the overseas-invested medical sector from the "limited (towards foreign investment)" category into a category that allows foreign investment, it quoted an official as saying.

China will gradually cancel limits on the caps of shares for foreign investors in the jointly invested medical organisations, and solely foreign invested medical units will first be piloted and then gradually expanded, the official said.

To achieve this, China will simplify the approval processes in opening hospitals.

According to the new guidelines, the provincial governments, instead of state authorities, will be able to approve joint-venture hospitals, but the opening of solely foreign-owned hospitals will still be approved by the Ministry of Health and the Ministry of Commerce, he said.

The news policy was announced as the public health system struggled to cope with complaints that the medicare was turning out to be the most costliest.

These policies are part of China's new round of medical reforms launched last year and the moves were expected to raise efficiency for investors in medical institutions, Liu Guo'en, a professor with the Guanghua Management College under the Beijing University said.