Does China's leading place in the global MedTech market reflect the commercial reality?

If you have never heard of any of these companies then you might be forgiven. Not because they are in any way discriminatory about who they trade with, but because the size of the internal Chinese market is so vast, that their activities tend to take place primarily within it.

Chinese government initiatives could influence the global market

Since the Covid pandemic, China's localisation strategy for MedTech has gone into overdrive, significantly impacting international competition.

The Chinese government's initiatives to reform the country's medical system and boost its domestic market, have led to an accelerated localisation trend, reshaping the competitive landscape, and influencing global trade dynamics.

The emphasis on 'Made-in-China' as a common precondition for government procurements, creates hurdles for foreign suppliers. International MedTech companies face challenges in accessing the Chinese market due to the preference for locally manufactured products.

The Chinese government continues to invest heavily in its public hospitals, making them a crucial part of the medical system reform. Volume-based procurement extends to medical devices, driving increased shipment volumes but squeezing profits for manufacturers.

Other Chinese government initiatives, such as 'In China for China' or 'In China for Global' demonstrate a commitment to both local and global markets. Made-in-China products have advantages in government procurement considerations, quicker approval processes, and lower costs.

Naturally, given the potential riches on offer, many western MedTech multinationals are now tailoring their R&D and manufacturing strategies to align with the Chinese market's unique needs and government initiatives.

Companies like Siemens Healthineers, Philips, and Medtronic are accelerating their localisation strategies, manufacturing products within China to better align with market needs.

Medtronic's strategic partnership with Changzhou National High-tech Industrial Development Zone demonstrates its commitment to manufacturing, R&D, and innovation in China.

Boston Scientific's launch of an intravenous ultrasound imaging product in Shanghai for the global market signifies a strategic move in alignment with its 25th anniversary vision.

Siemens Healthineers' construction of a large production base in China and Philips' goal to achieve 100% made-in-China products for certain segments further highlight this trend.