Countries along the Belt and Road Initiative represent another major market for medical devices.
Release date:
2018-01-29
The Belt and Road Initiative underscores China’s new, all‑round approach to opening up its economy, while also sounding the call for a globally integrated allocation of resources. Chinese medical device companies have responded enthusiastically, eager to seize the opportunity. However, given the industry’s unique characteristics, enterprises face significant challenges along the path of the Health Silk Road, leaving them uncertain and struggling to move forward. So where exactly lie these pain points?
The Belt and Road Initiative underscores China’s new, all‑round approach to opening up its economy, while also sounding the call for a globally integrated allocation of resources. Chinese medical device companies have responded enthusiastically, eager to seize the opportunity. However, given the industry’s unique characteristics, enterprises face significant challenges along the path of the Health Silk Road, leaving them uncertain and struggling to move forward. What, then, are the key pain points?
The healthcare market in countries along the route is vast.
The countries along the Belt and Road Initiative account for a combined population of 4.4 billion, representing 64% of the global total, with enormous healthcare needs. With the exception of a handful of developed nations such as Singapore, these countries are predominantly developing economies, whose domestic healthcare sectors remain underdeveloped; as a result, most of their medical supplies are imported—indeed, Vietnam and Laos, for instance, rely almost entirely on imports for their medical devices.
Meanwhile, after more than a decade of rapid growth, China’s medical device industry has achieved world‑leading technological capabilities in certain sectors. Under comparable technical conditions, “Made in China” products offer lower costs and superior cost‑effectiveness, aligning closely with the market demands of countries along the Belt and Road Initiative and opening up vast market potential.
According to data from the Ministry of Commerce, during January–August 2017, China’s medical device exports to the 64 countries along the Belt and Road totaled US$2.834 billion. The exported products were primarily single-use consumables, mid- to low-end diagnostic and therapeutic equipment, and rehabilitation supplies, with private enterprises accounting for the bulk of exports at 68%.
Undoubtedly, for Chinese medical device companies, the countries along the Belt and Road Initiative present substantial market opportunities; however, given the unique characteristics of the healthcare sector, they also entail numerous potential risks.
First, the medical markets in countries along the Belt and Road are still dominated by European and American brands, with limited recognition of Chinese brands. For Chinese medical device companies to successfully penetrate the mainstream healthcare markets of these countries, a relatively lengthy market‑development process is required.
Second, export trade involves both competition with established local market players and rivalry among foreign entrants. Many firms are accustomed to price wars, yet they often overlook that international trade demands careful consideration of complex factors such as legal disputes, after-sales service, patent protection, and crisis communications—factors that necessitate building in sufficient pricing flexibility; otherwise, failure is virtually inevitable.
Meanwhile, due to differing national conditions, products must undergo localized adaptations; there have been cases where Chinese companies, failing to account for the target market’s operating voltage, had their entire product lines deemed non‑compliant.
In addition, countries along the Belt and Road have begun erecting barriers to the import of purely medical-device products, increasingly seeking to encourage foreign firms to invest in or establish joint ventures with local partners, thereby fostering the development of their domestic healthcare industries.
Third, many medical device companies lack internationally minded talent; management and technical personnel dispatched overseas often struggle to adapt to local conditions, while locally hired staff fail to integrate into the company’s management system, resulting in significant operational challenges. Of course, there are also other complex factors, which will not be detailed here.
With the gloom of the past giving way to brighter prospects, medical device companies can seize the opportunity.
Given the industry’s specific characteristics, medical device trade entails stricter requirements for registration, regulatory compliance, training, and customer service, demanding substantial human and financial resources to establish a robust sales and service infrastructure. Moreover, establishing manufacturing facilities in countries along the Belt and Road would further broaden the scope of challenges, leaving companies unable to address these potential risks on their own. In light of this, how should Chinese medical device firms seeking global expansion respond?
Clearly, we must not shy away from challenges or halt our progress. Medicine knows no borders, and all lives are of equal value. Chinese enterprises have both the obligation and the responsibility to extend China’s high‑quality medical products and cutting‑edge medical technologies to the peoples of countries along the Belt and Road, thereby advancing the shared well-being of these nations.
Since a single company often lacks the strength to go it alone, what if several companies join forces? And what if they also leverage government support? Undoubtedly, the situation would be vastly different. Drawing on the insights of numerous seasoned professionals in the medical device industry, we believe that for medical device companies to successfully navigate the Health Silk Road, they must take action on the following fronts.
1. Study relevant national industrial policies, engage with pertinent government departments and think tanks to secure information support, and conduct thorough preliminary research and strategic planning for developing the medical market along the Belt and Road Initiative.
2. Focus on product and technological innovation, strengthen international marketing efforts, enhance brand awareness, and cultivate the image of “Made in China” as a premium brand.
3. Attach great importance to talent development by cultivating and recruiting internationally minded, trade‑and‑economy‑savvy professionals who are also capable of practical implementation, while simultaneously prioritizing the training of local healthcare personnel in countries along the Belt and Road. As the saying goes, “It is better to teach someone how to fish than to give them a fish”—by helping customers build a highly competent technical team alongside product sales, we not only enhance the added value of our offerings and strengthen brand affinity, but also alleviate the burden on after-sales service.
4. Establish a medical device industry alliance to internally integrate the core product portfolios of member companies, creating complementary, theme‑based product lines. By fostering mutual trust and shared benefits, the members will speak with one voice and act as a unified force, thereby strengthening their collective competitiveness.
Externally, in response to the procurement needs of medical institutions along the Belt and Road, we offer end-to-end integrated procurement solutions, along with value-added services such as staff training and financial leasing. Our approach has evolved from simply exporting medical devices to delivering comprehensive “product-plus‑service” solutions, ultimately extending to the full spectrum of the healthcare industry value chain.
5. Implement a phased approach to localizing operations in countries along the Belt and Road. Initially, consider establishing a China Medical Device Trade and Cooperation Park to showcase and promote high‑quality Chinese medical devices while providing end-to‑end support services. As conditions mature, develop a China Medical Device Industrial Park to enable localized production and achieve deep integration with the host economies.
6. Actively participate in national overseas medical assistance and infrastructure projects, leveraging government platforms to strengthen exchanges and cooperation with healthcare institutions along the Belt and Road, helping them establish comprehensive and scientifically sound healthcare systems, fostering mutual learning and shared development, and promoting win-win cooperation, thereby cultivating a favorable industrial environment for the Belt and Road Initiative.
The Medical Devices Working Group of the Belt and Road Initiative has been established.
As the core zone of Ningbo’s newly approved “Belt and Road” Comprehensive Pilot Zone in Zhejiang Province, the Ningbo Meishan International Logistics Industry Cluster is actively striving to become an international supply-chain innovation pilot zone and a “Belt and Road” cultural-exchange pilot zone.
Ningbo has already attracted a cluster of leading medical device companies. How to help these enterprises expand internationally and serve the healthcare markets along the Belt and Road Initiative has long been a key concern for the Meishan government.
Coinciding with the establishment of the Healthy China Promotion Committee of Xinhuanet, Meishan promptly engaged in coordination and dialogue, signing a strategic framework agreement. It also actively supported the committee in setting up an industry‑wide cooperation network for medical device enterprises. On November 17, Meishan convened a symposium on the “Belt and Road” initiative for the medical device industry under the “Healthy China” program, with the first cohort of member companies including leading medical device firms such as Kanda Medical, Lepu Medical, Meikang Biotech, Kailite, and Weizhuo Guanghua.
The participating delegates unanimously endorsed the necessity and significance of collaborative travel initiatives, resolving to establish a “Belt and Road” working group. They agreed to leverage Xinhuanet’s multi‑dimensional communication platform for outreach, organize specialized forums to engage with the health‑care authorities of countries along the Belt and Road, launch policy‑oriented research projects to formulate evidence‑based recommendations, set up an International Medical Industry Exchange Center for the Belt and Road in Ningbo, and build a “Healthy China” medical industry community, among other measures.
As a distinctive, new‑type national high‑end think tank and an institution tasked with advancing national strategies, the Xinhuanet Healthy China Promotion Committee will collaborate with relevant state ministries and the diplomatic missions of Belt and Road partner countries in China to help Chinese medical device companies develop tailored business models that are well‑suited to the specific conditions of healthcare markets along the Belt and Road.
This includes establishing a comprehensive application demonstration center and an integrated Healthy China industrial park locally, as well as partnering with central state-owned enterprises to jointly develop in-depth assistance projects that integrate infrastructure development, medical products, medical technologies, and healthcare services.
Little steps add up to great distances. At present, the Ningbo Meishan International Logistics Industry Cluster is partnering with the Xinhuanet Healthy China Promotion Committee to jointly establish a comprehensive medical‑device service platform, bringing in third‑party resources such as legal, consulting, registration, and supply‑chain services to help medical‑device companies expand into global markets and advance the national strategies of “Healthy China” and the “Belt and Road Initiative.”
→ Related News
0791-85628888
在线咨询