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CHINA: EASING FOREIGN INVESTMENTS IN JOINT-VENTURE HOSPITALS

The Chinese government has decided to facilitate foreign investments in joint-venture hospitals. In order to achieve this aim, the rules on setting up wholly-owned medical centers have been eased and restrictions on the percentage of foreign ownership in medical joint ventures and collaborations will be reduced.

Investors from Hong Kong, Taiwan and Macau will be allowed to set up wholly-owned medical centers in more locations. On the other hand, foreign investors can set up wholly-owned hospitals in certain areas such as the Shanghai free trade zone.

The government’s plan is keen to alleviate the pressure on China’s public healthcare sector which has been unable to cope with the rising demands of the market. China has spent 3 trillion yuan ($480 billion) on healthcare reform, but the system still faces difficulties such as scarcity of doctors, attacks by patients on medical staff and a fragmented drug distribution and retail market.

Chinese healthcare public sector is based on drug sales and contributes to inflated prices, kickbacks and tensions between patients and doctors. According to Health Ministry data, about 40 percent of public hospital revenue in 2011 came from prescribing drugs.

The government is restraining fake drugs’ trade, kickbacks to doctors and illegal sales tactics. Pharmaceutical companies in the country are feeling the heat of the government’s crackdown on corruption and pricing. The ease of doing business in the country has changed significantly as the government gets strict about implementing regulations. British pharmaceutical major GlaxoSmithKline has been in the line of fire since July last year over allegations of bribery and misconduct.

 

The gLAWcal Team

Friday, May 30, 2014

(Source: Reuters)

This news has been realized by gLAWcal—Global Law Initiatives for Sustainable Development in collaboration with the University Institute of European Studies (IUSE) in Turin, Italy and the University of Piemonte Orientale, Novara, Italy which are both beneficiaries of the European Union Research Executive Agency IRSES Project “Liberalism in Between Europe And China” (LIBEAC) coordinated by Aix-Marseille University (CEPERC). This work has been realized in the framework of Workpackages 4, coordinated by University Institute of European Studies (IUSE) in Turin, Italy.