What you're really talking about here is a market of about 300 million people.
That's almost the entire population of the United States.
For foreign investors to open the fully owned hospital in China, the major problem is best doctors.
It is a very good sign, but without building the entire ecosystem to support such sort of operation, we do not really see much strong enthusiasm for investors, for foreign doctors to participate.
The chat lounge. Chat lounge.
Chat lounge. The chat lounge unpacks views and opinions on hot issues in a more casual way.
Welcome to the chat lounge.
I'm Tingyuan joining me to discuss China's expanded access to wholly foreign owned hospitals R.
Professor John Tsai, founder and chairman of the Academy of China Healthcare Innovation Platform or CHIP Academy.
I'm your Tanguin senior fellow at Taihe Institute and Professor Liu Baochen, the director of the Center for International Business Ethics, Beijing based University of International Business and Economics.
A warm welcome to the chat gentlemen.
Let me start the show with Minipo.
Minipo, do you use any healthcare services from a foreign funded hospital?
Can you compare the services provided by public and foreign funded hospitals?
That's the first time for John to chat with us on the show.
So shall we begin with you?
Okay, so I haven't used the foreign invested hospital yet because I don't use hospital very often.
Good for you. Then maybe Ainer?
Yes, I both use the Japanese Friendship Hospital.
I've used private clinics and also Beijing United.
They are all originally funded by, in part, foreign.
Obviously, the Japanese, Sino -Japanese Chinese Friendship Hospital has been around for a long longer.
Beijing United has been around for many years.
It was founded by foreigners.
I know one of them.
And then these clinics, SOS clinic and raffles and things like that.
So I have been there.
Then have you been to any public hospital?
Chinese, I mean Chinese Public Hospital?
Never? Yes, I have.
I've been living in China since 2005, and I have sampled everything that Beijing has to offer.
And unfortunately, because of a situation very close to me, I spent a lot of time in hospitals for about five years, seven years ago.
Not related to my own health, but the health of somebody.
I understand that. But can you compare them to any extent?
Yeah, I mean, it's an evolution.
When I first came to Beijing, every expat would tell me that I had to go to Beijing United or the Sino -Japanese hospital and say, oh, you can't go to local hospitals.
But I did go to the local hospitals for some minor things like a sprained foot or something like that or a stomach upset.
I really wanted to see it.
It was interesting because I was not used to this idea that I would show up at the hospital.
It was fairly crowded.
Family members were there with the patients.
And you would sign up, get a card, identification, show your passport as a foreigner, and then they'd give you a slip of paper and you'd stand in line and you'd go to see somebody and then they recommend a test and you get in line again to pay for the test and then you get the test and you keep doing
this. It was kind of like a spoke and hub situation where you're always running back to pay it.
Obviously, things have changed fairly dramatically since then.
The foreign funded hospitals tended to operate more like on the US model.
You had to show some sort of insurance or put down some sort of deposit, show that you could pay, and then they would do a series of tests and you would just receive the treatment from doctors.
But I noticed that there was a massive differential in price between local hospitals as in it might cost me 5 to 20 yuan for the basic visit.
And then a few yuan here and there and then some medications.
The whole thing would cost less than 150 quai.
And that included getting the card from the hospital.
If I went to Beijing United, I could expect minimum, minimum, even if it was a short stay, 1500 quai.
Literally a 10 times difference.
So basically, crowd sickness and this price are the most distinct differences between these two kinds of hospitals.
Yeah, but I mean, fast forward to today and the situation has changed dramatically.
You still have to pay and things like this, but the things have been streamlined.
They've made things much more efficient.
The hospitals are much more modern.
They have the latest equipment.
I'm always shocked to see what they've done.
I've been to a neonatal hospital in Xinjiang, which I could not believe.
I mean, it had just been built at that time.
It was over a year ago.
It had just opened about three or four months before.
And it was better than any hospital that I'd ever seen in Beijing.
And quite frankly, I mean, the doctors there were in charge.
They wouldn't even allow we were trying to do an interview with somebody who had just given birth.
And they insisted that we shoot it through the wired glass because we were not getting into anywhere near the patients.
So, yeah, I mean, I've seen a lot of different parts of the health care system here.
And I can tell you that it's been an evolution.
I started coming here in 2000.
I think I first time I went to a hospital was around 2005 or 2006.
And since then, it's just been a complete change.
Right. Quite impressive.
I only have the experience of a public hospital, so I can't say no more.
What about about Chen?
Fortunately or unfortunately, I'm very seldom visit hospitals.
I was never hospitalized.
Well, unless I had my teeth fixed, but seeing the Sano Japanese Hospital, which is state owned, although the Japanese sponsorship is not really a drug venture or foreign hospital.
The it's so much overcrowded.
It's so scary. I would rather spend my own money instead of going for reimbursement to go to a dentist nearby run by private enterprises.
And so because I work for the Chinese public institutions and they also have their own clinic or smaller hospitals over there and entire medical expenses can be fully reimbursed.
So, therefore, virtually there's no need for me to visit any of the foreign hospitals here.
But you can see that there are a number of hospitals involving foreign investment here in Beijing and they are more reserved for elites like Enertangen.
Thank you for that.
High worth people. So honoring people is very difficult to really tap into their pocket for such sort of service.
They are pretty polite and there are many professionals and the environment is really clean.
So I paid some visit as a consultant for some companies in such industry.
But I was not really a victim or beneficiary of foreign hospitals here.
That's totally fortunate.
And so let's turn to the new policy.
Well, China is obviously opening its health care service market wider to the outside world, green lighting, holy foreign hospitals in eight key cities and the island province of Hainan.
And some reports call it a policy shift.
So Baochen, do you see it the same way?
I think it's a shift of orientation.
Because in 2014, there was already a public announcement to allow foreign investment in the industry of health care and particularly to build hospitals.
But of course, you know, that was primarily focusing on job ventures.
But now this shift is fully owned, fully wholly owned.
The foreign investment, the hospitals can be permitted in eight cities.
But at the moment, I could see that there is not much enthusiasm from this particular industry because, you know, the health care industry is highly regulated and there are many hurdles that need to be tapped before the investors can really plunge their money into China.
And now the major issue lies in that policy alignment, because, you know, in 2014, we had that policy and then in 2015, the NDRC, I mean, the National Development and Reform Commission issued a list of foreign investment and then in which they restrict the foreign investment into the Chinese hospital
industries. So therefore, different ministries have different attitudes towards that.
I hope this time China is getting more serious.
And we have, you know, the cross cutting, ministerial really policies that fully support such because we do really need that for whatever reason for the Chinese consumers, for the Chinese market and also for the growing Chinese economy and bring China into a more of a high end service industry.
So these are really critical need, but there is still a lot more homework for the regulators, particularly to takeaways.
Well, tap into such kind of homework later on.
But maybe it's not that China was not basically not serious last time when it introduced a similar policy.
It's just maybe the conditions were not that right at that time.
John, what's your interpretation of that?
Yeah, right now I'm thinking this slide, the policy seems a bit more seriously, considering the international, the conflict of the country and the country.
Also, considering the macroeconomic situation in China.
So the government right now, it's really want to open the door more widely to the foreigners.
Also, we see the last few years, we already wavered a visa for many countries for from the 15 days right now to the 30 days we are welcome more foreign visitors to China.
Or if I'm thinking this is in line with this general policies, we want to attract more foreign investment.
Also, we want to provide more better health care service to the foreigners in China.
Also to the more afferent, more rich Chinese people, because especially before the COVID -19, we see quite more and more rich Chinese people, they seek to better health care in the foreign countries if they have some kind of more serious problems.
So this is general intention government to try to open the door, try to attract foreign investments.
However, I'm thinking the general situation right now, Chinese health care market is still quite highly regulated.
Also public hospitals right now still account for about 80 % of the health care services in China.
So the situation right now is still quite tough for foreign investors to open the fully owned hospital in China.
The major problem is best doctors, the experts right now is most doctors, they are really, they stay in the public hospitals.
For the foreign hospital in China, they need to have a good doctor, good expert in order to attract patients.
It will be quite difficult to let the foreign doctors to work in China for longer time.
Maybe you could have some a few foreign experts come to China work maybe a few weeks, a few months.
I'm thinking, still, if we have a better doctor for this kind of foreign investor hospital, if they could attract a better doctors, they will be make things much better.
But anyway, this policy because hospital investment is taking a really longer time, many years.
So this policy at least to have a good intention, have a good start, maybe gradually when the situation it's better and better, maybe that could be potentially it could be a good movement.
When you say concerns about regulations, is it, you know, about bringing in those doctors or experts to China?
Yes, because for the policy to allow the foreign doctor to practice in China, for example, there is a problem have a proven to practice in China.
So there are some kind of policy to restrict the very easily for this kind of foreign doctor to practice in China.
And there are actually there are a number of regulatory issues involved.
First, how those hospitals are really certified, because this is really heavily regulated.
And the Ministry of Public Health and also the Chinese FDA are really very responsible, I think, also very tough.
The watchdogs over the practice of hospitals, and then the inspection over the entire operation, entire workflow, they also have a very strong template.
And some of the foreign hospitals, they also encounter that oh, we adopt a foreign approach, we adopt the innovative approach, but the stereotype of those, the red capes does not really appreciate at the moment.
And then the Chinese pharmacopeia also has to align with more of international standard.
I used to bring a foreign investment into the Chinese pharmaceutical industries.
And because we were so innovative on combining the bow tab together with the chemical therapies, and then they said, oh, you know, our book does not really update to that point yet.
So there has been a very long time in waiting for the bureaucracy to have their own consensus Another issue is the reimbursement issue, because you can hardly expect that the Chinese insurance companies are really very much enthused in helping those foreign hospitals to really to have the reimbursement
program. Because one is that they have a smaller number of patients.
And secondly, there are also regulatory hurdles.
And so therefore, they only target those high networks in the videos here in China.
And then there is also competition.
And also, as the professor also mentioned, that they have very tough difficulty in attracting high quality doctors from existing Chinese state -owned hospitals, because the Ministry of Public Health, Ministry of Education do not have a program to qualify their academic capabilities.
And they have also a very tough issue in the promotion track along the Chinese existing channels.
So these are really the issues.
That is why I always emphasize that we need coordination.
It is a very good sign for the Chinese policy shift.
But without building the entire ecosystem to support such sort of operation, we do not really see much strong enthusiasm for investors and also for foreign doctors to participate.
This has been the CHAP Lounge.
When we come back, find out which city may be most favored by foreign investors.
Don't go away. The strong wind was howling and whistling.
He was the first Chinese citizen to graduate from Yale University in the mid 19th century.
I was born on the 17th of November.
She had prominent features.
Three of us were old enough to lend a helping hand.
He navigated between two vastly different cultures and moved further to realize his dream and promote understanding between the people of China and the United States.
Xi Jinping was a native of Hanyang.
I realized no danger.
China is really awakening.
Come and join us in discovering the incredible journey of Yong Wang in his autobiography, My Life in China and America.
Check out the audible stories on radio .cgtn .com and all major podcast platforms.
Just search for the podcast Books and Beyond and find My Life in China and America.
Welcome back to the CHAP Lounge.
We continue our chat on China's expanded access to wholly foreign owned hospitals.
It takes time to sort all those things out.
A talent issue aside, and then there comes this question of how attractive it is to foreign investors, right?
Whether you want to go into a market, one deciding factor is how big the market is.
China actually already got more than 60 jointly funded hospitals serving the high end healthcare market, like elites like you.
But how big of a gap is there in market demand that needs to be filled?
How attractive is it for foreign investors to just throw their money into China's healthcare market?
Well, it's not that attractive as Lu Baohsiung has pointed out there, regulatory issues and all sorts of things that are out there.
So from a business model, if I'm looking at the United States, where I can extract huge amounts of money, I mean, 16 % of the world of the nation's GDP is devoted to healthcare.
But that's not going to happen in China because you have a national healthcare, you get an idea, there are about 13 ,000 hospitals that service.
Because of an obstacle.
That service 83 .5 % of the population, those are government hospitals.
The rest of the hospitals are smaller divided up.
But what you're really talking about here is about a market of about 300 million people.
Well, let's put that in perspective.
That's almost the entire population of the United States.
And these are people who have the funds to expand a lot of money.
So why is the Chinese government doing this now?
And have there been efforts in the past?
Well, as Lu Baohsiung and Chi have pointed out there, there have been.
I've experienced it from a slightly different point of view.
I have a friend who has a medical facility on Hanching Island.
This is near Hong Kong, Macau.
It's kind of jointly put together, but it was allowed that they can actually have medical therapies there that would not necessarily be approved in China, but that have regulatory approvals by either the EU or the US.
The FDA, Food and Drug Administration type of organization said, OK, this is safe.
So it's kind of an in -between.
And they've been trying this for a while.
Now, why would the Chinese government do this?
Well, there's some concern about Chinese going abroad and getting therapies.
It's unregulated. You don't know what they're actually getting.
It would be much better to have it on shore, near shore, where things can be, in fact, monitored because there's a genuine concern about Chinese getting medical care because they may not be, you know, they can easily be talked into things because they don't have the medical knowledge.
And so the government is acting to, in essence, protect them to make sure that, you know, nothing on tour is happening.
I mean, I had a situation where my wife was dying of cancer and people would come up and say for a million dollars, all right, and money back guarantee I'll give you a magic pill and this pill will cure the cancer.
And if it doesn't cure the cancer, we'll give you your money back.
Well, obviously, they're playing the law of averages.
They were not going to give anything that had any medical value or anything like this.
That happened in China or other markets.
Yes, it happened in China.
Happened in China. They were using intermediaries.
This was a Taiwanese group.
But it's not, you know, there were groups coming in from Hong Kong.
Everyone was just let's pray on this group of people who don't have the medical knowledge and tell them that we have magic and we can solve this.
Or, you know, they'd say some long story about how this was secret research by an independent, a brilliant physician from Switzerland or something like that.
They always had some sort of story.
When you're desperate, right, and we've seen this in America and throughout the world.
When you're desperate, you'll do almost anything for those you love.
In China, medical situations involving something very serious.
The tendency is to send them to Beijing because Beijing has the best hospitals.
They're not really knowledgeable about the doctors or things like that.
But they say, well, if I've sent my relative to Beijing and paid whatever is necessary, I've done everything I can and I've fulfilled my duty.
And this is very important.
I mean, for the Chinese in America, when you have a medical problem, you might have, depending on your situation with your relatives, you might have a not a very welcome.
They might not even come and visit you in China.
I mean, they literally bring you food every day, try to make sure that you're comfortable.
So there are different cultural aspects to this.
There's also, you talked about the funding.
Yeah. Chinese firms are split on this.
There are insurance firms within China that provide additional care.
Even in America, there are a number of insurance programs who said that they would not cover Beijing United because they said the costs are so beyond anything, even in the United States.
And they wouldn't give any discounts and they wouldn't work with insurers.
Some insurers said, we won't cover it or we'll only cover up to a certain amount.
But there are a lot of insurance programs that are kind of sitting offshore.
For instance, most expats get insurance through Hong Kong or from their home countries.
And this gives them access to these kind of international clinics and things like that.
So it's not, very few people are actually paying out of pocket for them.
In terms of the doctors, you have to understand, I think what China is trying to do is leverage their understanding of how their approaches and protocols.
I mean, most people think that doctors are some sort of magic.
Doctors have good memories.
It's required. Every time you engage, you find a set of symptoms, what you have to do is go through the protocols that you were taught in medical school.
And what those mean is, say, OK, this person has these six symptoms.
Protocol one for these six systems is do these things.
If that doesn't work, go to protocol B, and then you go down the line.
It's wasteful. AI can probably change some of that, but not all of it.
There still has to be some sort of diagnostic input by human beings.
And of course, the robots aren't doing the tests and things like that.
So China, I think, is trying to do what they did with the legal system.
China was in need of understanding international law.
But as a foreign lawyer, you cannot practice in China.
But you can be an advisor, an expert, and then a Chinese lawyer can actually execute whatever is necessary.
And I think if I'm not mistaken, I think this is what they're looking for.
They're looking for the transfer of understanding protocols, knowledge, into the Chinese market.
And they will pay for that.
And I do not think that that is a huge thing, because the doctors are not actually practicing.
They are consulting.
And there's a long history of this in China.
In fact, when I was chairman of the state's International Trade Council for Wisconsin, I learned that many of our leading doctors in the United States were actually coming to China to learn microsurgery, because in Shanghai, they had the best microsurgery practicum there, because these doctors were doing
these microsurgeons five, six times a day, whereas our doctors would do them five or six times a year.
So the amount of knowledge that they were able to get from that was very useful.
So this idea that it's just China kind of getting knowledge from everywhere else, it's not true, especially today.
I know people who are doing drug testing here, because we're to qualify for FDA or the EU or even in China, you have to put your pharmaceutical, your drugs and your procedures through their paces.
And it's cost a lot of money.
It takes a lot of time.
A lot of it has shifted to China.
Now, because of regulatory issues, geopolitical issues, basically, a lot of these procedures have been reversed.
For instance, any procedure that had involved a military hospital in China has now been said, well, that could be subject to being disqualified.
They don't really say why they just say, well, and, you know, international intelligence and all the usual nonsense.
But at the end of the day, this is going to create more work in China.
And China has become a kind of test bed for experimental procedures and things like that because of the huge data set that's involved.
There are several outstanding issues from the investor's perspective.
One is that because the state -owned hospitals are heavily subsidized by the Chinese government.
And so there is no expectation that they're going to receive the same preferential treatment from the Chinese government.
So therefore, you can hardly expect level playing fields of competition for investment here in China for hospitals.
Second is that existing Chinese hospitals, their return on investment is pretty much dependent on selling drugs, the pharmacies within the hospital.
So the medical service does not really acquire really a lion's share in the entire revenue portfolio.
So that's another consideration.
The third is that because of the getting more and more stringent government procurement program, whether those foreign hospitals will be able to enter into the government procurement program or certain institutions like my university, we sign up with three hospitals.
And only, you know, the medical bills from these identified hospitals from our university procurement program can be reimbursed by all universities.
So all these issues are really some of the major considerations for investors to calculate before they are ready to put up their investment.
Right. Like you all mentioned, maybe there are all kinds of reasons dampening their enthusiasm entering the Chinese market.
But what China now is doing is just trying to prepare itself, right?
That doesn't mean it's the same case in the future, right?
Preparing itself. Put itself in a condition more in line with international practices.
Yes, not many of them are interested, but there are some, right?
Because I know there are some jointly funded hospitals under construction in Hainan.
And also there are 60 plus jointly funded hospitals also running pretty well, actually, on the Chinese mainland, like the United Family mentioned by you all.
And Xiamen Changgun Hospital, invested by Taiwan, Taikun.
So wondering, maybe, John, you can explain a little bit.
What do you see those hospitals doing right to succeed, at least for the present in China?
And maybe they can be a good lesson for others who want to enter the Chinese market in the future.
Yeah, these hospitals, they do bring some kind of a new hospital management.
Also, the service quality is much better.
They have a better environment.
Also, the doctors, they are more professional.
So all these kind of things, they will bring some new things to China, the healthcare sectors.
So for the public funded hospital, they do could learn something.
From these foreign funded hospitals.
Also, for example, in Shanghai, the government start to open the door for the public insurance reimbursement for some of these kind of foreign funded hospitals.
So even the money is not a lot, but still this kind of new policies, they will attract more patients to these hospitals.
So that's why these foreign invest hospitals, they really want to government could allow them to the public, the insurance could reimbursement for their hospital.
I'm thinking these kind of policy could be a little bit more open for the other foreign funded hospital.
So that's important for the reimbursement.
Right. Then Ida, can you give us any idea, you know, from the perspective of the family of a patient?
I bet you got a lot of tips for those foreign investors?
Well, yeah, the reason that it's such a huge market, I mean, it's easy within China to say, oh, you know, it's such a small percentage, but that small percentage represents a huge amount.
Pretend you're a European insurer, and you look at the lower costs in China, and you say, well, we can offer insurance there and make money.
So it's not just about the primary care, the hospital itself, they're saying, okay, let's get insurance going.
Some of them might say, okay, part of our insurance is we're going to have a preferred provider network, kind of like what Lou Balchong was saying with this university, we only, you know, reimburse in this area.
The number of expats is actually going down.
That could change dramatically in the future as China continues to open up.
But I think there's a sense that you have to be very specialized.
I'll give you a very specific case.
There's something called electron gun therapy, you know, when you have a tumor, they can use the electron gun to go through your skin and try to hit the tumor and kill, you know, the cancerous cells.
This is a long standing procedure, the therapy, etc, etc.
But there's also something called proton gun.
Proton gun is the difference between electron gun is like using a shotgun, right, and aiming it in the general direction of what you want to hit.
Proton gun is like using a rifle.
You can hit things very, very specifically.
Huge differential in cost.
Right now there are a number of proton gun therapies here, very few.
And they have huge waiting lists.
So when investors are looking at it, it's not like they say, okay, we want to provide, you know, general care for people.
No, no, no, they're they're looking at specialist areas, cancer, diabetes, things where people who are more able financially to afford them.
And these, you know, these proton guns, they can make money because they have this huge waiting list and they can spread the cost, the very expensive cost of doing that.
So when investors are looking at the market, it's not general, just, you know, this idea that they're just going to start a bunch of hospitals or something like that is nonsense.
And they, it goes the other way around right now, especially in the United States, and this is, this is going on for the last 30 years.
Traditional Chinese medicine is now being accepted by insurance companies.
Why? Because it's so much less expensive.
And it's easier to sell when you have an aging population, which has, you know, constant creaks, groans and pains.
And these things can't be cured.
They're just part of the aging process.
Traditional Chinese medicine is far superior to anything we have in the US.
Because if we give you, you know, very expensive, very powerful drugs, there are side effects.
So you take one drug and then you need another drug to counteract those effects.
And another one, you end up taking 20 pills, just because you know, you're having an ache in your lower back.
Traditional Chinese medicine, a little slower acting.
But it's really good for addressing...
But you're suggesting those foreign funded hospitals to offer Chinese medicine in the Chinese market?
No, I'm saying that it is a two way things.
I dislike this idea that, you know, somehow just trying to get the knowledge from the West.
It's nonsense. It's a two way flow.
And this is something people have to remember about knowledge and culture.
You know, when they're trying to set up these barriers between people and scientists and things like that.
It's silly. All you're doing is preventing people from getting what they need.
So China is in essence, exchanging, you know, many thousand year old practices that have been very effective and field tested in China.
They're exporting those out to the West.
And the West is in turn, sharing knowledge about the protocols, the machinery, you know, operating procedures that are out there.
But I can tell you, I run into doctors who are here and they say, wow, you know, this is incredible.
I've never seen anything like it.
I mean, they give, yeah, it's crowded and everything like that.
But they give a standard of care, which is far above what we offer in the United States.
I've been, you know, lived in the United States.
I had my son who was I thought choking to death.
And I took him to the emergency medical things in a very nice area of town.
And they said, well, can you wait a few hours?
They said, my son is turning blue.
What are you telling me to wait a few hours?
He'll be dead. They're like, well, it's not my problem, man.
I just hear at the desk and, you know, I'd call a doctor, but they're not answering.
I was furious. I knew the head of the hospital, called him up and said, what kind of rinky dink operation you're doing?
They knew I was a lawyer and things like this.
And then somebody saw me.
But why is that necessary?
Why, you know, somebody coming in off the street who had the same issue, right?
Why would they have to, you know, if they don't have that kind of blanchy or push, they're not a lawyer, they don't know that they had a hospital.
They get terrible care.
Really, really horrible.
And this would never happen in a Chinese hospital.
So the doctors ironic said, well, there are pluses and minuses.
But the pluses are the majority of people get very good care that they would not get in the United States, for instance.
The Chat Lounge. The Chat Lounge unpacks views and opinions on hot issues in a more casual way.
I have to say what a dramatic life you're having, Aynor.
Oh no, it sounds worse.
You just have to remember I'm old.
I bet it's not so dramatic with Aynor, who's maybe of the same similar age of you.
But I think Aynor is suggesting that foreign investors maybe need to diversify or differentiate the services.
Specialized. Specialized.
They have to look at segments when they have money, because they're offering something that is not available in China.
I totally agree, because, you know, specialization is really the key for them to get a foothold in China, because for a sort of holistic treatment, large sized, sophisticated hospitals, it is not there yet.
And hopefully, the Chinese regulation can really further improve their transparency and also their alliance with the international standard.
But at the moment, they have to really have a unique selling propositions in the marketplace and found the right niche in order to be able to attract the high net worth patients.
And the other is that how they can really leverage on the existing medical capacities, because China does allow the doctors in the state -owned hospitals to have second jobs.
So that's some good news for them.
That they can offer attractive packages for those the doctors who are unwilling to leave totally their existing organizations to contribute to the quality of medical service in the foreign hospitals in China.
And the other is that they can also arrange on an international scale with the insurance companies so that people can really get the type of reimbursement on a global basis, particularly for tourists and travelers.
So these are really the issues that they can touch upon the top cream of the entire market.
But they cannot be as ambitious simply to stay and compete on equal footing with existing state -owned ones.
All of those regulations are straightened out.
And what kind of preparations do you think of the foreign investors themselves need to prepare for?
Like you said, they should find some niche market.
What kind of niche markets are up in your mind?
Like Anna mentioned, dealing with the acute diseases like tumor, cancer, et cetera, if they have the right type of recipe, the right type of expertise that they can really stand out, yes, definitely they can penetrate into this market.
Then if they tie up with foreign insurance companies, and so that the travelers from overseas or experts that stay long in China, they can also have the alleviation of their worry to get their costs reimbursed.
And then if they have unique medical equipment, they can provide more of the diagnostic services because to address the long chronic diseases like diabetes, like autoporosis, et cetera, and this is also a market because the only those, the high income individuals care about a more thorough and also holistic
type of recipes. So other patients do not really have the financial capability to take care of themselves.
So these are really the green light they can possibly have in making a sustainable operation in China.
Fair enough. Let's now turn to possible locations for those investors.
The new policy lists eight cities and one province for foreign investment and hospitals.
These cities are Beijing, Tianjin, Shanghai, Nanjing, Suzhou, Fuzhou, Guangzhou, and Shenzhen, and the provinces.
Obviously, the island province of Hainan.
So which city do you think could be more favored actually by those investors if they feel it's a good investment?
Maybe John? Oh, I think where the first tier cities is like Beijing, Shanghai, Guangzhou, Shenzhen.
Because these cities, they have a more foreign residents here.
Also they have a more multinational company here.
They have a lot of more employees.
Also have a high end customer here.
Also, these local, these cities, the government still have a better like more experience to deal with these kinds of foreign funded practice.
So I'm thinking so these cities will be more favorable than other places.
Also Hainan province have a special situation because next year Hainan province will have a similar situation.
Hong Kong, they were separate from the from the mainland.
They have a more independent power.
Also Hainan already have a special policy to allow the introduced foreign the new drugs and medical device.
They have improved in China in mainland yet, but they could introduce these kinds of drug device new technology there.
So in that kind of situation, they are able to attract some patients to receive the medical care service there.
So I'm thinking this type of policy have this list of these cities, including the Hainan where have a better chance to be successful.
Indeed. But I understand you pay special attention on the Hainan, special economic zone actually.
Like John just mentioned, it has a unique status, right?
Which means it has more leeway to introduce some policies that may not be adopted elsewhere.
So what do you see, you know, the prospects of Hainan developing itself into a favorite destination for foreign investors who want to invest in hospitals or health care services?
Yeah, I participated in a number of discussions with Chinese policymakers with regard how the medical services can be simply having a very much innovative and even a bold approach within Hainan.
And the prospect is really huge because you see that how many Chinese high income individuals get their medical services in Japan, in the United States, in Europe.
So the market is there.
The issue is that how can we really pair with the hospitals in Japan, in the United States, or in the EU?
So if we are able to bring up the type of quality that is even similar to match the total service that is available in those highly developed markets, we definitely are going to attract more of the patients from China and Hainan now.
If you really go to the public hospitals, you are, you know, standing in the line for several hours and the doctors, they have a good reason to be in patients, dealing with patients.
And also the entire environment they provide, not only in a sort of quick therapy, is really something that we can expect.
Plus that now, with more of the digital technologies, you know, playing a key role in the further construction of Hainan Island, and that can also be highly leveraged and less regulated, you know, in together with new drugs, et cetera.
So this does really offer a huge prospect.
Why do we need to see that?
Because next year, the Hainan Island will be able to announce its full operation.
And then, you know, hopefully they can attract more of those investors and also the entire supporting services surrounding such sort of medical care.
Bao Zheng has already given his suggestion or tips.
Then Aynore and Zhang, what would be your prescription for, you know, either Shanghai or Hainan Province, which, you know, have set their sights on becoming a key player in the global medical tourism industry?
Maybe it's a bit early to talk about that.
But what about the prospects for them in the coming two to three decades?
Yeah, I'm thinking because the investment in a hospital, it's really a long journey, take a lot of time.
But right now we could really have this kind of policy start to let the investor know we are going to open the door.
So it could be a good intention preparation.
But also we just mentioned some of the experts already mentioned we need also have the other policy to be consistent.
For example, I'm thinking about patient data.
But right now, because for the Chinese patient data, they have some kind of data still restricted to the foreign countries.
So so these kinds of policy need also to work out.
Isn't it with the other countries like the US, it's allowed.
But any foreign country for some kind of patient data, for example, the gene data, some kind of data, you are not allowed to to take out of China.
So so, for example, if you have a hospital, the foreign foreign hospital in China, they need to collect some kind of patient data, they have to, I guess, so hard to deal with this kind of patient data protections in need.
You need to have a more detailed this kind of policy guidance to work out.
Yeah, indeed. And I know.
Okay, so there are very different aspects here that you have to consider.
If you're looking at Hainan, it's about a couple of things.
One, medical tourism, China would like to get involved in that, there's a differential between the cost of doctors in China versus other places.
So there's real possibility of perhaps building hospitals.
But this idea that foreigners are going to build full service hospitals is nonsense.
It doesn't make any sense.
You're not going to see a whole bunch of Beijing United being created.
What you're going to do is see clinics, smaller entities that are concentrating on issues.
Now in Hainan, because the way it's set up, you can use, you have access to drugs and treatments and machines that have not been approved in China yet, but have been approved by other jurisdictions.
A lot of the wealthy have homes or can access homes in Hainan.
So it's closer to home, it's Chinese.
You're not in a foreign land and things like that, where language would be an issue.
In terms of other opportunities, I think when you start talking about the major cities, these cities are around 20 million people.
You know, you go to Europe and you'll find that there are a lot of countries that don't reach 20 million people.
So the density and how compact it is is very attractive if you have something very special that it's not being offered in the local market or there's a perceived qualitative difference between what you offer and what is currently available.
Those are the opportunities.
People have to get out of their minds that foreigners are going to start building hospitals like potato chips throughout China.
It would not be economically viable.
Quite sensible. And with that, we wrap up our chat for this session.
Many thanks to Aina Tangen, senior fellow at Taike Institute.
Professor John Tsai, founder and chairman of the Academy of China Health Innovation Platform, and Professor Liu Baochen, director of the Center for International Business Ethics at the University of International Business and Economics for sharing your insights.
And also personal experiences, which are very valuable.
The show is available on all major podcast platforms.
Please email us your comments at radio at cgtn .com.
I'm Tuyen. Thank you for listening.
We'll have more chat at the chat lounge next week.
The best military commander is not he who fights 100 battles and wins every one of them.
The best military strategy does not lead to the desiccation of the enemy's capital city.
Decoding the art of war will help you understand why there's no art in war and how things stayed undefeatable using the science of war with fun stories and insightful breakdown of famous battles.
Find Decoding the Art of War wherever you listen.
I cannot marry you while your mother regards me.
Stepping to the world of timeless elegance with Mrs.
Spring Fragrance, a captivating audiobook by Edith Eaton read by Manleng.
Because the green leaf still clings to the bow.
Experience the lively yet complex lives in Chinese -American communities at the turn of the 20th century as Edith Eaton's delicate prose weaves together themes of tradition, change, love and identity.
Forget all that belongs to the joy of life.
Follow the journey of Mrs.
Spring Fragrance and witness the struggles and fights of those living on a rapidly changing exotic land while holding on to their cultural traditions or more importantly to their identities.
You could hardly believe that his daughter was seriously opposed to becoming the wife of such a good looking prosperous young merchant as Wanli.
Join Books and Beyond for Mrs.
Spring Fragrance. Let the stories come to life in your imagination.
Subscribe to Books and Beyond for free on your favorite podcast platforms or log on to radio .cgtn .com for more.
