Shanghai is encouraging the set-up of wholly foreign-owned hospitals in a trial program to promote the opening-up of the healthcare industry as part of broader efforts to further open its services sector. The action plan allows overseas hospitals to operate in Shanghai, and maps out a detailed policy guiding the number of pilot projects in the city, eligible investors and operational requirements. Foreign-invested hospitals are permitted to set up in the China (Shanghai) Pilot Free Trade Zone, the Lingang Special Area, the Hongqiao International Business District and the Oriental Hub International Business Cooperation Zone, and other selected places. The move will enrich Shanghai's medical service offerings and meet the diverse health service needs of Shanghai-based residents.
Raffles Medical Group, a leading private integrated healthcare provider in Asia, currently operates three hospitals in Shanghai, Beijing and Chongqing city. “The new policy is encouraging, and we continue looking for more high-quality projects in China,” Kenneth Chung, General Manager of Raffles Hospital Shanghai, told the Global Times.
In September 2024, China allowed the setting up wholly-owned foreign hospitals in nine cities across the country, including Beijing, Shanghai and Shenzhen. In November, the government released detailed guidelines outlining specific conditions and management measures. Since then, the push for healthcare opening-up has gained pace. On December 16, Singapore-based Perennial Holdings obtained a Medical Institution Practice License in Tianjin, and is on track to open its first wholly-owned general hospital in 2025. “We highly commend China's open-door foreign investment policy on healthcare. This boosts confidence for investors keen on China's healthcare space and drives foreign investment and foreign-local collaboration, given the growth prospects of China,” the company told the Global Times, adding it is undertaking similar healthcare projects in Kunming, Xian and Guangzhou. Another foreign healthcare provider, Luye Medical Group, is also planning to build an international medical center and a foreign-funded specialty hospital in Shenzhen, Guangdong province.
IHH Healthcare, Asia's largest private healthcare group, entered the Chinese market about 20 years ago, and it now cooperates with Parkway Shanghai Hospital, a multi-specialty tertiary facility in Shanghai. “Over the past two decades, we have witnessed the remarkable vitality and potential of the Chinese market, with Parkway Shanghai making several significant investments locally,” said Prem Kumar Nair, CEO of IHH Healthcare. The company is making a major investment by establishing a new 8,000-square-meter ambulatory care center in downtown Shanghai that will provide comprehensive outpatient and day surgery services when it opens in 2025.
“Given China's large population and an ever-growing middle class, the demand for private healthcare services is rising,” Wang Bo, Research Fellow at the Research Center of National Drug Policy and Ecosystem, said. Wang noted that setting up a high-standard medical care system is a complex process. It requires significant infrastructure development and the recruitment of very skilled medics, while coordination with local hospitals is also important.
The China Daily adds that foreign investors are not permitted to establish hospitals dedicated to psychiatric diseases, infectious diseases, hematology, traditional Chinese medicine, integrated TCM and Western medicine, or those specializing in ethnic minorities' medical practices. Wholly foreign-invested hospitals are also prohibited from engaging in high-risk medical and ethical activities, including organ transplantation, assisted reproductive technologies, prenatal screening and diagnosis, inpatient psychiatric treatment and experimental treatments using tumor cell therapy.
The hospitals are to be located in key economic zones, biopharmaceutical industry clusters and downtown districts with a high concentration of expatriate residents. Each of these areas will allow a maximum of two foreign-owned hospitals. The Shanghai document specifies that foreign investors must implement advanced hospital management concepts, models and service standards. They are also required to provide cutting-edge medical technologies and equipment at an international level, complement or enhance local healthcare service capabilities and expand the diversity of healthcare offerings. These hospitals are permitted to hire physicians and healthcare professionals from Hong Kong, Macao and Taiwan, but at least half of the hospital’s management and healthcare professionals must come from the Chinese mainland.
John K. Hsiang, Chairman of the Jiahui Health Executive Committee, said: “We hope that the government can allow short-term work permits for nurses and technicians from overseas. Additionally, the review process for expat doctors to receive professional title recognition could be streamlined.” Jiahui Health operates the Hong Kong-owned Jiahui International Hospital in Shanghai, which was opened in 2017. It also runs outpatient clinics in Shanghai and other cities.
