HBI Deals+Insights / Internationalisation

Two more headaches for health operators looking at China

Breaking into the Chinese healthcare market is notoriously difficult for foreigners. It usually requires lengthy relationship cultivation or strong local partners to front up any deal – often both. One expert well grounded in introducing foreign investors to the market tells Healthcare Nova things are about to get even harder.

We hear that without an official announcement, government officials have effectively put health provider feasibility studies on hold. Our source tells us: “We were doing feasibility studies and everything just stopped. We were told ‘You have to stop because the government are not going to approve any new developments until there are better policies.“

What format these ‘better policies’ might take, and when they might be introduced is unclear, but our source expects this slowdown in development to run months beyond any eventual policy changes.

Foreign property developers – often key to international healthcare operators plans – may be being deliberately targeted by this move as the spectre of a trade war triggered by US tariffs looms, our source says, adding: “We knew restrictions would be coming, but we didn’t know they would be coming quite so so fast.”

Compounding the problem for operators needing land is its price. The Chinese property market has been “too hot” for years, our source adds, explaining it has seen consistent growth since 2008, particularly when compared to other sectors. Even if you know you want to go ahead, our source says, you may be priced out of the market.

We would welcome your thoughts on this story. Email your views to Andrew Garthwaite or call 0207 183 3779.