China allows establishment of wholly foreign-owned hospitals in major cities

China on Friday unveiled a plan to allow the establishment of wholly foreign-owned hospitals in some major cities, in a move to further open up its medical sector.

The pilot work plan, released by the National Health Commission (NHC) and three other government departments, grants approval to the cities of Beijing, Tianjin, Shanghai, Nanjing, Suzhou, Fuzhou, Guangzhou, and Shenzhen, as well as the island province of Hainan.

A major reform resolution adopted by the Communist Party of China leadership in July highlighted telecommunications and medical services as areas that need broader opening.

In an explanation of the work plan published on Friday, the NHC stated that the two sectors have high domestic market demand and strong investment interest from foreign investors.

In 2023, the number of hospitals in China topped 38,000, with public hospitals accounting for less than one-third of the total. However, public hospitals accounted for 83.5 percent of the total number of patient visits nationwide, according to official data.

Since 2000, China has allowed the establishment of joint-venture medical institutions with foreign investors. After more than 20 years of development, there are currently over 60 foreign-invested joint-venture medical institutions in the country.

The work plan explicitly excludes traditional Chinese medicine hospitals and prohibits the foreign acquisition of public hospitals.

Aiming to introduce high-level international medical resources, improve the supply of medical services, and optimize the business environment, the document specifies pilot requirements, management measures, and other related terms.

The plan permits wholly foreign-owned hospitals to operate as general, specialty, and rehabilitation hospitals.

It also includes restrictions. For instance, such hospitals are barred from performing medical activities with significant medical or ethical risks, such as human organ transplantation.