Unlocking the China Market
Opportunities & Challenges
by Chris Cotton, China-Britain Business Council
The numbers when it comes to China are always startling: a population of over 1.35 billion, over 160 cities with at least 1 million people, an expected urban population of over 1 billion by 2025. The world’s largest economy, China experiences average annual GDP growth of 10% and possesses over two million USD millionaires. 632 million Chinese are internet users, 527 million of whom utilize mobile internet.
(GDP in US$trillion - The GDP of China [red] is soaring away from that of the UK [blue])
With figures like that, it is unsurprising that China is viewed as one of the world’s most lucrative export markets by almost all sectors, and this is no less true for the health and life sciences industry. The ageing population of China is a significant concern, with at least 185 million over 60 year olds, while diabetes has reached epidemic proportions – over 95 million cases were estimated in 20-79 year olds in 2013. By 2050, the over 60 and diabetic populations will stand at a staggering 330 million and well-over 143 million respectively. As such, healthcare and life sciences are not only important, but are viewed as a priority by both the Chinese government and people. This presents massive export potential for the IVD industry globally and, more specifically, in the UK.
(China's workforce has begun to shrink, whilst it's elderly population grows and grows)
China is the fastest growing IVD market in the world, with 16% annual growth. Having only started in the 1980s, it is estimated that there are now over 6,800 IVD manufacturing and trading companies in China. In spite of this, outdated laws and regulations, a diversified and scattered industry, weak R&D capacity and a talent shortfall still restricts growth. As a result, there is a need to improve cooperation and communication within the Chinese government, as well as with manufacturers, investors and purchasers. Governmental efforts to regulate laboratory testing as well as an increasing number of private hospitals and independent testing laboratories will drive the IVD market in China in the coming years, though a lack of expertise in advanced technologies at the time will likely limit that growth.
The desire for a mutually beneficial relationship between the UK and China has never been stronger, with David Cameron describing 2015 as a ‘golden year’ in UK-China relations on the back of a £54.3 billion bilateral trade agreement signed in 2014. China is the UK’s sixth largest export destination for manufactured goods, whilst Chinese investment in the UK totaled £18 billion in 2013-2014. Chris Cotton explains that there is generally a preference to work with the UK over other European countries due to a reputation for reliability.
Whilst not appropriate for all companies, the potential value of China to the UK IVD industry is clear. It is harnessing this value that will be the challenge
The China-Britain Business Council have over 90 staff working in 13 offices across China, as well as 10 offices in the UK, working to help hundreds of UK companies every year. For more information on how they can help you to take advantage of the export potential of China, visit their website.