Interpretation of the Notice on Establishing a Wholly Foreign-Owned Hospital

I. Background

The National Health and Family Planning Commission has followed the Decision of the CCCPC on Some Major Issues Concerning Comprehensively Deepening Reform and Several Opinions of the State Council on Accelerating the Development of Health Service, as well as requirements of deepening medical and health system reform. It has decided to carry out pilot projects of establishing a wholly foreign-owned hospital to promote health service development and better satisfy the medical needs of the public.

II. Range of pilot work

Pilot projects will be carried out in Beijing, Tianjin, Shanghai, Jiangsu, Fujian, Guangdong and Hainan. Foreign investors will be allowed to set up wholly foreign-owned hospitals through mergers, acquisitions or other means.

III. Requirements

1. Foreign investors should be able to independently bear civil liabilities and have experience in medical and health investment and management.

2. The wholly foreign-owned hospitals should meet basic national medical institute standards.

3. Provincial health and family planning administration and business departments will be responsible for reviewing the qualifications of the wholly foreign-owned hospitals.

4. Establishment of wholly foreign-owned hospitals and related changes should go through standard legal procedures and follow relevant legal requirements.

Establishment of wholly foreign-owned hospitals should also meet the requirements made by provincial health and family planning administration and business departments.

IV. Implementation

Provincial health and family planning administration and business departments should take steps to open up the medical institute market and control risks in formulating a plan to build wholly foreign-owned hospitals. They should report the plan to the National Health and Family Planning Commission and the Ministry of Commerce. The provincial health and family planning administration should supervise and manage wholly foreign-owned hospitals in accordance with the law.

China allows foreign-owned hospitals in more cities

BEIJING, Aug. 27 (Xinhua) — China has allowed private hospitals solely owned by foreign investors to open in seven cities and provinces, the Ministry of Commerce (MOC) announced on Wednesday.

Wholly foreign-owned hospitals are permitted in the cities of Beijing, Tianjin, Shanghai and the provinces of Jiangsu, Fujian, Guangdong and Hainan, according to a statement jointly issued by the MOC and the National Health and Family Planning Commission dated July 25.

Foreign investors can either set up a new hospital or take part via mergers and acquisitions, it said.

But the MOC specified that only investors from Hong Kong, Macao and Taiwan may set up hospitals featuring traditional Chinese medicine.

Administrative approval procedures will be handled by provincial-level authorities.

Wednesday’s announcement came after an agreement was signed on July 22 to pilot the first wholly foreign-owned hospital in China in the Shanghai Free Trade Zone.

The Chinese central government has stressed reform in its healthcare sector following public demand for more and better healthcare services. A cabinet statement in May pledged price reforms in public hospitals and that more private hospitals would be established.

China vowed to expand its healthcare service sector so that it is worth 8 trillion yuan (1.3 trillion U.S. dollars) by 2020.

There were about 5,400 private hospitals on China’s mainland in 2008, with that number rising to 10,877 by the end of October 2013, according to official figures. Public hospitals, which provide 90 percent of China’s medical services, totaled 13,440 by the end of October.

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