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The healthcare market in China is growing at an astonishing speed, primarily boosted by factors such as the growing population —particularly the aging population — rapid urbanization, surging domestic and international investment in R&D, and continuous government support. Today, the healthcare market in China is the world’s second-largest, closely behind the US. However, China’s healthcare sector is growing at the fastest rate in the world and is expected to become the world’s largest healthcare market in the future.
According to the latest report from McKinsey, China’s healthcare market is projected to grow at an unprecedented CAGR of about 12%. Healthcare spending in China is expected to nearly triple, reaching $1 trillion by 2020, up from $357 billion in 2011. The government in China has decided to take major steps towards improving the local healthcare infrastructure, by approving a blueprint called “Healthy China 2030”, pledging to build a healthy China in the next 15 years. By 2030, the size of the healthcare market is expected to reach $2.3 trillion.
McKinsey also points out that “Three themes will shape China’s health-care market: the continuation of economic and demographic trends, further healthcare reform, and the policies articulated in the government’s 12th five-year plan. Some of these forces — such as improvements in infrastructure, the broadening of insurance coverage, and significant support for innovation — will have positive implications for multinational companies. Healthcare expenditures have more than doubled — from $156 billion in 2006 to $357 billion in 2011 inching closer to 5 percent of the country’s GDP. From pharmaceuticals to medical devices to traditional Chinese medicine, almost every health sector has benefited.”
When it comes to market segments, the pharmaceutical industry is still the largest contributor to the country’s booming healthcare market. Currently, the Chinese pharmaceutical market is worth over $110 billion, and ranked as the world’s second largest pharmaceutical market, after the US. This figure is forecasted to grow dramatically to $167 billion by 2020 and further increase its share in the global market. By 2017, China’s pharmaceutical sales are expected to hit $80 billion, larger than the pharmaceutical sales of Brazil, Russia and India combined.
Meanwhile, the medical device sector is another fast-growing segment in China’s healthcare market, maintaining double-digit growth rates for over a decade. In 2016, the medical device market in China reached $53.62 billion, an increase of over 20% compared to 2015. While in 2017, the medical device market in China is estimated to reach $58.6 billion. Nearly 73% of this growth is fueled by hospital procurements.
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