China is pushing for domestic sourcing for key medical devices. According to an opinion piece by Nikkei Asia, the policy is putting pressure on multinational firms to turn over their essential technology.

The Chinese regime published a list items in May last year that hospitals must purchase solely from domestic suppliers. This year, multiple local authorities told hospitals only to use domestically made medical and testing equipment. 

For example, Anhui province banned public hospitals from buying imported equipment without approval in May.

As more hospitals restrict their procurement of foreign products, some companies have increased their production in the country. 

Nikkei Asia cited multiple international corporations producing their items on the mainland, including the top three foreign manufacturers, Germany’s Siemens Healthineers, General Electric Healthcare from the U.S., and Dutch company Philips.

In June, Siemens said it wanted to localize production in China as a “fully Chinese company.” GE Healthcare showcased computed tomography and other equipment designed and produced in China at a Beijing event in August.

The news agency indicated that companies are intrigued by China’s enormous market. It has high growth potential, considering the country’s aging population.

According to local media, Chinese medical equipment market revenue is predicted to double by 2025 from $140 billion in 2021. However, it was already comparable to the U.S. From public bidding numbers alone, sales of Computed Tomography and Magnetic Resonance Imaging scanners reached $3.5 billion, and $2 billion annually, respectively.

Nikkei Asia warns that Beijing wants international producers to transfer research and development, design, and procurement of critical components.

In December 2021, Beijing issued a 14th Five-Year Plan to promote the country’s domestic medical equipment industry. Part of the plan was urging international businesses to transfer technology.

In July, the regime unveiled a draft amendment prioritizing procuring goods with Chinese value-added. 

One source told Nikkei Asia, “Designing, development, and procurement of critical components in China will be required.”

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