The Chinese government recently announced guidelines for the easing of market access barriers in a number of key sectors. The medical and healthcare industry is identified as one of the sectors earmarked to attract private investment.

Last month, the State Council promulgated the Guidelines on Innovation of Investment and Financing Mechanisms for and Encouraging Private Investment in Key Sectors (国务院关于创新重点领域投融资机制鼓励社会投资的指导意见) (Guidelines).

The Guidelines aim to promote innovation of investment and financing mechanisms and outline various policy initiatives aimed at encouraging private capital investment in the medical and healthcare sector. Some of the highlights include:

  1. accelerating the conversion of public institution medical institutions into the private sector thereby allowing private capital to be involved;
  2. encouraging private capital to invest in the medical and healthcare sectors in various ways (wholly-owned, equity joint venture, cooperative joint venture, joint operation, leasing, franchising, etc.) and allowing qualified private medical institutions to be appointed providers for the purposes of social medical insurance;
  3. waiving “administrative charges” for not-for-profit medical institutions, and giving a 50% discount on “administrative charges” for for-profit medical institutions;
  4. allowing privately-owned medical institutions to enjoy the same utility rates as those applicable to public medical institutions; and
  5. allowing public medical institutions to determine the pricing of medical services (other than basic services) at their own discretion. The pricing of basic services of public medical institutions must continue to follow the pricing policies stipulated by the government.

The Guidelines are expected to lower market access barriers for private investment in the medical and healthcare sector and build on other recent regulations aimed at promoting more private investment in the sector. We anticipate that such policy changes will result in more private (and foreign) investment in this sector in the near future.

Other areas covered by the Guidelines include telecommunications, ecological and environmental protection, agriculture, municipal infrastructure, transport and energy infrastructure.

It is worth noting that these Guidelines are currently only high-level policies and need to be reflected in further implementation rules before taking effect. Responsibility for preparing such implementation rules has been allocated to various government departments and are expected to be published by the end of March 2015.