Korean hospitals cautious on ChinaKorean hospitals are cautious about expanding their investments in China, which is expected to soon be the second-largest medical industry in the world, a local report said yesterday.
According to a report released by the Korea International Trade Association (KITA) yesterday, the Chinese medical market is expected to grow to become the world’s second-largest after the United States by 2020, providing investment opportunities for Korean medical institutions.
Citing the Korea Health Industry Development Institute, the KITA report noted that a total of 111 Korean medical institutions have entered overseas markets as of last September. Of them, 38 are in China, the largest number, followed by the United States with 36, Southeast Asia with 27, Russia with seven, the Middle East with two and Canada with one.
The KITA report is based on a survey conducted on 38 medical institutions in China, which asked about their current business environment and investment outlook. The survey showed that 64.7 percent of respondents expected their operating profits to increase after five years, but only 47.1 percent said they plan to expand investment in China.
“The survey also showed that, although their operating profit is increasing and they have an optimistic outlook on market conditions, there are many Korean small-size hospitals [entering China], and their services are limited,” the report stated. “There are restrictions to growth in their businesses in China because many of them target Korean residents in China rather than actual Chinese nationals when it comes to medical services other than plastic surgery.”
What medical institutions found challenging included a lack of market information and capital as well as poor marketing competitiveness. They also found it hard to understand local legislation and find local partners.
The survey was conducted at a time when the global medical industry is growing rapidly and many Korean hospitals are taking an interest in entering overseas markets.
According to a McKinsey report titled “Healthcare in China: Entering Uncharted Waters,” the global medical service industry is expected to reach $3.8 trillion next year and increase an average of 8 percent each year through 2020.
By 2020, medical spending in China is expected to reach $1 trillion, becoming the second-largest market in the world. Demand for medical services is increasing steadily in China.
BY LEE EUN-JOO [firstname.lastname@example.org]