As the China-Australia Free Trade Agreement (ChAFTA) looks set to be ratified later this year, a new report has identified the healthcare sector as one of the key beneficiaries from the agreement.
The report into ‘Australia-China healthcare opportunities’ by the University of Sydney’s China Studies Centre, National Australia Bank and the George Institute for Global Health has identified areas where Australian businesses can capitalise on China’s increasing demand for quality healthcare.
“China is changing its disease profile from that of a developing country, where infectious diseases are much more dominant to that of a developed country in which cancers, heart disease and obesity are much more prevalent. This will have a fundamental impact on healthcare in China,” said Professor Kerry Brown from the University of Sydney's China Studies Centre.
"One important example is China’s addiction to smoking. China is the biggest manufacturer, grower and consumer of tobacco in the world. The health and financial burden this habit has placed on the Chinese healthcare system is only just starting to be realised."
China is changing its disease profile from that of a developing country, where infectious diseases are much more dominant, to that of a developed country in which cancers, heart disease and obesity are much more prevalent.
The report identified the major health challenges China will face over the coming decades and identified key business opportunities for Australian healthcare companies.
Director of Australia-China relationships at the George Institute for Global Health, Professor John Knight said Australia’s most successful biomedical companies were looking at China for growth and opportunity.
“China is facing a host of new health challenges, including an ageing population, changing diets, increasing prevalence of obesity and environmental problems,” said Professor Knight.
“The demand for high quality health care is a constant, unlike the boom and bust cycles of many other industries such as the resources sector.”
China and Australia are two countries which differ markedly in size of population and wealth, but Australia stands out as a competitive role model compared to other developed economies such as the United States, which still has significant problems associated with access to and equity of healthcare.
"Our future is in facing north. The potential and possibility is there for enduring growth for the prosperity of generations to come. China is one of the largest markets in the world, and unlocking access to this market will change the landscape for Australian businesses,” said Angela Mentis, Group Executive Business Banking from NAB.
"There are new growth prospects on the horizon for Australian health and aged care businesses, with the opportunity to take world-class Australian health industry expertise, education knowledge and capability across China, and into the Asia Pacific region.
"That’s why we’ve helped produce this report – we want Australian businesses to succeed, which comes by understanding the unique challenges facing the growing Chinese middle class.”
Australia and China's health partnership
China is Australia’s second largest market for pharmaceuticals, with exports worth AU$381 million in 2013-14, including vitamins and health products. This is set to grow as ChAFTA stipulates the elimination of tariffs from pharmaceutical products.
The Chinese government’s decision to build 7500 public hospitals through the private sector over the next decade creates a significant business opportunity for Australian private hospital operators. ChAFTA allows Australian qualified service providers to wholly acquire and manage hospitals in three municipalities (Beijing, Tianjian and Shanghai) and four provinces (Guangdong, Jiangsu, Fujian, Hainan).
In the past aged care institutions have not been very popular in China, however with the rapidly ageing population and the legacy of the one-child policy there is now a strong demand for aged care institutions in the country. ChAFTA permits Australian service suppliers to establish profit-making aged care institutions throughout China.
Research and development
Australian companies will be permitted to carry out research and development and provide these services through Australian-owned subsidiaries based in China.
Traditional Chinese Medicine
Traditional Chinese Medicine is the subject of a separate side letter added to the main ChAFTA agreement. The Australian government commits to exchange information and discuss policies, encourage and support engagement between relevant professional bodies and registration authorities for practitioners, and encourage and support research.
Recommendations for Australian businesses
Fast facts about China’s health challenges