Two recent joint ventures demonstrate potential opportunities for health care providers to expand into the Chinese market.
The first venture involves Raffles Medical Group, a large Singapore-based health care provider, collaborating with Shanghai LuJiaZui (Group) Co, Ltd., a China real estate developer, to build a 400-bed, full-service hospital in the New Bund International Business District of Shanghai’s Pudong New Area. The new hospital is expected to cost approximately US$128 million, and will serve domestic, expatriate and international patients.
As part of the second venture, which was originally announced in November 2014, Australian healthcare provider Ramsay Health Care has signed, though its Malaysian affiliate Ramsay Sime Darby Health Care, a joint venture agreement with Chengdu Jinxin Healthcare Investment Management Group. Under the agreement, Ramsey will obtain a 50% equity share in the joint venture for an investment of approximately US$135 million, and will involve the four hospitals Jinxin currently operates in Chengdu, as well as a 500-bed women’s health facility Jinxin plans to open later this year.
The ventures are occurring in the context of both a rapid rise in health care spending in China and China’s recent general trend of relaxing restrictions of foreign healthcare investments, including liberalization of hospital and senior care investment restrictions. Furthermore, the National Planning Guideline for the Healthcare Service System (2015-2020), summarized here, reflects a commitment to further encourage private investment in hospitals, which, if fulfilled, should accelerate investment in this historically-restricted sector.