Multinational medical equipment giants hold an 80% share of the market in China. But this situation is changing without being noticed.

According to the General Administration of Customs (GAC), the annual growth of medical equipment imports for China from 2003 to 2005 was over 10%; but the growth in the first seven months of 2006 was only 2.3%, greater than the same period of 2005.

Exports of China-made medical equipment have dropped between 15.5% and 35.9% annually, while imports of medical machinery from abroad has increased at an annual rate between 11.9% and 79.1%. The US, Europe, Japan and other developed nations are the major suppliers, accounting for 85.6% of all new medical equipment exported to China.

Experts say the issuance of regulations limiting medical examination fees has reduced demand for imported medical devices.

At the end of 2005, the National Development and Reform Commission (NDRC) and the Ministry of Health (MOH) jointly issued the "Notice for the guiding opinions on creation and adjustment of prices for large medical equipment, checkups and treatment" The notice prohibits hospitals from pricing examinations and treatment that require large medical equipment with the origin and model of the equipment. The notice also requires hospitals to abide by the "non-profit" principle. The NDRC and MOH have also ruled that hospitals have to calculate usage costs of large medical equipment and publicize the result so medical facilities around the country can reference service costs when using equipment made in China or abroad.

In the past, hospitals charged more money for the use of imported medical equipment. As one of their biggest earners, enthusiasm for imported equipment and other products began to grow. This, of course, came as a heavy blow to patients who struggled to pay their soaring medical bills. Checkup fees, for example, have become the second biggest component of medial bills, standing only after medication fees. In addition, this has also impeded the production of China-made medical equipment and instruments.

China-made high-tech medical equipment and instruments are, however, starting to replace imported models. The Pearl River Delta, the Yangtze River Delta and the Pan-Bohai Sea areas have become the top three locations for manufacturers of medical equipment and instruments. The R&D and manufacturing of comprehensive high-tech equipment and instruments has developed rapidly, supported by the improving manufacturing competence of domestic companies. China-made products have become strong rivals with their imported counterparts.

The Jan-to-June value of products delivered by China's domestic medical manufacturing industry was RMB6.49b, up 31.6% from the same period last year. And this growth continues. Industry profit totaled RMB1.69b, up 41.9% from the same time last year.,

However, foreign manufacturers and joint ventures still hold the lion’s share of China's medical equipment and instruments market. Data shows that foreign companies and joint ventures still account for 7 of the top 10 companies on the market. Joint ventures and foreign companies also make up at least 50% of total sales turnover and profits of the market’s top 50 enterprises.