Upsurge of China in Global Medical Device Industry
The Medical Devices Industry has wide range of complex, unsophisticated goods from bandages, hospital supplies to high-tech capital equipment’s (diagnostic & imaging equipment). The advancement in technology has led to adoption of innovation in device development leading to rise in the market. China is set to climb the medical device global value chain by stepping into the medical device by investing huge on OEMs (Original Equipment Manufacturers). In past few years, the country captures the largest share of FDI for medical device sector from worlds leading too medical devices companies.
FDI project share by region 2009-2017
The GVC (Global Value Chain) for medical devices is broken down roughly into six different phases and the values are defined as per the requirement – R&D (high value), Manufacturing and Assembly (low value), and Marketing, Distribution, and Other sales activities (high value). The production of components for low tech product such as fabric and precision working for metallic stents and the production of parts that range from medium to high that include software, pacemakers, and circuit boards reflects lower labor cost in entire Asia. The Chinese government has strong focus towards the investment and positioning itself as one of the fastest growing economy for maximum exports across the globe. The contribution and corporation by FDI have played a vital role in reconfiguring the country medical device business sector. This has influenced the local suppliers to provide good quality products as to stay competitive in the market and meet the needs of consumers as per the MNCs product. Apart from the FDI, the government has also supported in offering favorable regulation and local incentives to Chinese medical devices players who have expanded their reach domestically at a significant rate in past five years. According to a study, the Chinese domestic companies accounted about 70% of the market share in 2017 across all segments: IVD, cardiovascular, orthopedics, diagnostic imaging, nephrology, hearing aids, and smart wearables. Further, the government has laid multiple initiatives to support long—term growth and innovation in the healthcare sector. The country is also attempting to push AI in diagnostics and making healthcare more accessible, affordable, and timely. The large tech companies are looking to participate in Chinese growing market. Medical devices will further drive the advanced penetration in China market encouraging both preventive care and patient adherence through remote monitoring. Thus, the rise in China for medical devices will continue to grow and continue to make investments and partnerships in order to remain pertinent in 2030.
– Mohammed Azhar,
Senior Research Analyst,