Foreign Investors Foresee Profits in Chinese Healthcare Sector

October 4, 2011

Unlocking Word Meanings
Read the following words/expressions found in today’s article. 

1. go the extra mile (idiom) [goh thee ek-struh mahyl] – try harder to get tasks or jobs done correctly
Example: Managers often hire employees willing to go the extra mile to reach sales targets.

2. bureaucratic (adj.) [byoor-uh-krat-ik] – characterized by complicated structure and regulations
Example: Bureaucratic methods delay business processes.

3. pharmaceutical (adj.) [fahr-muh-soo-ti-kuhl] – of or relating to medicine or drugstores
Example: Pharmaceutical sales are expected to rise due to the increase of bacteria-related diseases.

4. upgrade (v.) [uhp-greyd, uhp-greyd] – to further improve the quality of something
Example: I went to the computer service center yesterday to upgrade my PC.

5. reform (n.) [ree-fawrm] – a change or improvement of something for the better
Example: Government tax reforms improved business in the country.

Read the text below.

Foreign investors see big opportunities in China’s healthcare industry as more Chinese go the extra mile to get the best medical service.

Despite China’s economic reform 30 years ago, the government has failed to provide efficient medical services to most of its citizens. Currently, China spends only 5% of its Gross Domestic Product (GDP) compared to the global average of 9%.  As a result, hospitals in China are often overcrowded, understaffed, corrupt and bureaucratic.

However, increasing healthcare demands in China have provided private investors with opportunities for profit. Wealthy citizens travel hundreds of miles to line up at state hospitals. Pharmaceutical sales are expected to rise 20% annually in the future. With these demands, investors planning to upgrade hospitals and medical services predict a 20% return of their investment. 

In addition to growing demands, investors also see opportunity in the government initiative to improve healthcare. Recently, the government showed willingness to allow foreign investment to upgrade rural hospitals and clinics. It has also released $125 billion to provide basic medical care to all of its citizens.

Experts say more work is needed to take advantage of these opportunities. According to Peking University professor Gordon Liu, adviser on China’s healthcare reform, investment guidelines should first be clear. The government should clarify how much of the upgraded hospitals would be owned by the communist state. Insurance systems must also be allowed to repay expenses from private hospitals. 

At present, the healthcare sector is still taxed higher compared to other industries. It would take several years before these foreign investments can be approved by the Ministry of Health.

Viewpoint Discussion
Enjoy a discussion with your tutor.

Discussion A

·         What are the advantages and disadvantages of allowing foreign companies to operate in a country?
·         If allowed, should there be a limit to the amount of investment?

Discussion B

·         What does the present healthcare system in your country provide?
·         Are there any issues or problems related to healthcare system in your country? Explain your answer.

October 4, 2011