China to ease curbs on foreign investment in hospitals

The State Council said in a statement that it will also increase the number of medical service providers from Hong Kong, Macau and Taiwan able to set up private hospitals in China, and allow other qualified foreign investors to open wholly-owned medical centers in areas such as the Shanghai Free Trade Zone.

There are a number of thresholds currently imposed on foreign investors in the hospital sector: foreign ownership of a JV cannot exceed 70%, while Chinese investors must hold at least 30%; both parties are restricted to operating the business in the country for a maxiumum of 20 years.

The statement did not give any timeframe for the new rules.

China's healthcare sector has become increasingly attractive to private equity investors as the government eases restrictions on foreign capital in order to improve services.

The service provider segment  saw an uptick in activity last year, with $202 million invested across eight deals, nearly double the 2012 figure, according to AVCJ Research.

Notable deals over the past 18 months include: GIC Private and Goldman Sachs' $100 million investment in medical examinations provider iKang Healthcare, which has since listed in the US; the $49 million investment in preventive check-up services provider Meinian Onehealth Healthcare Group by The Carlyle Group, Cathay Capital and Ping An Insurance; and Warburg Pincus' investment in the maternity-focused hospital chain Amcare.

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• Topics
• Greater China
• Healthcare
• Regulation
• China
• regulation
• healthcare
• Joint Venture