US health care businesses see China as a waiting market, ready for the introduction of world-class hospitals and care centers.  China understandably regards medical care as intensely domestic, and has limited foreign involvement to joint ventures or minority ownership.  

A door has now opened.  A cooperative framework for establishing a hospital in the Shanghai Pilot Free Trade Zone allows a German investor (Artemed Group) to create the first wholly foreign owned hospital in China since the PRC Revolution.  This is a breakthrough since the 2010 announcement that China would allow foreign companies to own and operate hospitals in China, a notice that was followed by second thoughts and tentative steps toward implementation.

Approval of the Artemed Group’s project was immediately followed by a July 25, 2014 Notice regarding establishing Wholly Foreign-Owned Hospitals, issued by the Ministry of Commerce and the Health and Family Planning Commission.  The Notice provides a framework for foreign medical care enterprises to establish wholly owned hospitals in seven pilot regions – Beijing, Tianjin, Shanghai, Jiangsu Province, Fujian Province, Guangdong Province and Hainan Province.  This progression is consistent with China’s effort to open its economy by pilot projects, then Ministry guidance, and eventually an established basis for foreign businesses to enter sectors of the Chinese economy on a wholly owned basis.