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October 04, 2010 05:11 AM Eastern Daylight Time
Research and Markets: Economic Analysis for the Chinese Healthcare Industry 2010

DUBLIN--(BUSINESS WIRE)--Research and Markets (http://www.researchandmarkets.com/research/717065/economic_analysis) has announced the addition of Frost & Sullivan's new report "Economic Analysis for the Chinese Healthcare Industry 2010" to their offering.

?Economic Analysis for the Chinese Healthcare Industry 2010?
Chinese healthcare industry witnessed one of the fastest growths in the world in the last two decades. The growth of the healthcare industry was mainly driven by globalization initiatives and increased domestic and foreign investment after WTO accession. The government is continuously working to reform the health sector and healthcare development is a priority for it. Current healthcare objectives include - universal health insurance coverage, development of rural and urban healthcare, and modernization of the healthcare system. The Country Industry Forecast gives an in depth analysis of recent changes in the economic policies and its affect on the healthcare industry and opportunities for the healthcare related industry participants.

Chinas economy made rapid strides after 1979, when the country became a free economy and started opening up for foreign trade and investment. Over the past decade, the country has witnessed massive industrialization, driven by an influx of investment in the manufacturing, infrastructure, and real estate sectors. It is the third largest economy in the world, behind the United States and Japan. Predominantly an export-driven economy, China has been manufacturing and exporting commodities and services to many developed and developing nations. The Chinese economy has also been characterized by high savings rates - more than 50.0 percent of the gross domestic product (GDP) constitutes national savings. When the country suffered a setback in investments and exports in 2008 due to the economic downturn, the government offered monetary and fiscal policy instruments to stimulate domestic demand and reduce dependence on exports. The country eased its tight monetary policy in 2009 by lowering interest rates and reserve requirements to ensure sufficient fund supply. In November 2008, China announced a stimulus package of $584.00 billion to cover four major components - large-scale government spending, industrial restructuring and rejuvenation, scientific research, and expansion of the social safety net. Aggressive lending by banks, strong domestic demand, and huge economic stimulus package kept the economy growing at a steady clip in 2009. Chinas economic outlook for 2010 and beyond is more optimistic than that of the developed countries because the country has relied less on borrowing from the capital markets and has been more of a global lender. This strategy has placed it in a good position to self-finance stimulus measures, which can help it maintain healthy growth rates.

The growth rate of the Chinese healthcare industry is the fastest in the world over the last two decades, on the back of globalization initiatives and increased domestic and foreign investments after World Trade Organization (WTO) accession. The Government has been continuously working on reforming the health sector and has accorded priority to healthcare development. For instance, while generic drugs dominate the domestic market, the government is actively looking to popularize innovative drugs from traditional Chinese medicine (TCM). Currently, TCM, a growing pharmaceuticals sub-segment in China, accounts for one-fourth of the market; it is dominated by local manufacturers and is highly fragmented. In August 2009, the Government issued a list of 307 essential drugs as a part of its plan to create an Essential Drug System in the country over the next ten years. This system will ensure that people have access to these drugs at affordable prices and thereby, this plan will go a long way in further popularizing generic drugs.

The healthcare industry will also benefit from the governments active promotion of biotechnology. Indeed, the biopharmaceuticals market is showing strong potential with its revenues growing annually at a double-digit rate and is expected to continue to do so in the future. Meanwhile, China has emerged as the worlds preferred destination for clinical trial outsourcing due to its low costs, large patient pool, easy recruitment in trials, and a rapidly growing pharmaceuticals market. If projects take off smoothly, the cost advantages offset the challenges associated with managing projects remotely. Pharmaceuticals and medical devices R&D got a shot in the arm in 2009, when the Government hiked its total spending on scientific R&D to combat the financial downturn. Currently, China has the highest number of registered clinical trials in the Asia Pacific.

In addition, the medical devices market offers considerable potential due to citizens economic affluence, aging population, compliance with tariffs and international standards post WTO, and the Governments efforts toward improving the accessibility of basic healthcare services, especially in rural areas. China's plan to build or renovate 200 hospitals every year is expected to create significant demand for medical devices. However, healthcare technology is still in its development stage in China, with clinical diagnosis and electronic patient record system installations being restricted to the big hospitals. The country is hoping to remedy this situation by encouraging the usage of IT in the healthcare sector. In 2009, China developed an ambitious healthcare IT plan to modernize the delivery of healthcare services with digital hospitalization and the creation of electronic health records and information network for the next generation.