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Australian businesses in the healthcare sector are well positioned to capitalise on significant changes in the Chinese healthcare system as major demographic shifts unfold in the world’s second largest economy.
NAB’s Institutional Banking Global Head of Healthcare and Ageing, Michael Ball, says there’ll be 358 million people over 60 years of age by 2030 — 148 million above the number in 2015. Ball points out that the population isn’t only getting larger, it’s fundamentally changing from one that’s rural to one that’s urbanised.
It’s that trend which is changing something that has been at the heart of traditional Chinese culture for centuries — that the elderly are cared for, by their family, in the family home.
“These trends have been recognised by the PRC Government and have led to a series of healthcare reforms including the 12th five-year Plan,” says Ball. “Those reforms are moving in the right direction but there’s a lot more to do which potentially presents opportunities for Australian business.”
Ball, who recently took part in the Australia Week in China trade delegation, said he saw plenty of evidence that Australian businesses were continuing to identify the potential gaps in China and how they could leverage their experience in the sector.
Chinese companies in the healthcare sector have certainly recognised the expertise and experience of Australian healthcare businesses. A recent report by KPMG and Sydney University found that healthcare was the third most favoured sector by Chinese investors after real-estate and renewable energy.
“From an industry sector perspective, Chinese investment in Australia now reflects the new normal: China’s focus on middle-class consumption – premium quality health, lifestyle and services,” the report said.
Ball says Australian businesses are already taking advantage of the market opportunity in China in sub-sectors such as aged care, vitamins & supplements, medical devices and research & development.
Dr Danxing Wu, the Dean of the Institute of Health Industry, Beijing Geely University pointed to independent living for the aged, rehabilitation, mental health services and shifting to a primary care model, as areas for improvement, Ball says.
And with the China-Australia Free Trade Agreement (ChAFTA) taking effect in December, there’s now an even clearer pathway for Australian businesses to engage with the opportunities in the healthcare sector.
“There’s a growing appetite for Australian businesses to better understand the market in China, the opportunities it may present and start to build relationships that may better position future decisions,” Ball says.
The recent Australia Week in China trade delegation demonstrated there was a desire to collaborate in the future.
But Ball cautioned that businesses should seek credible independent advice at all levels that may impact their business. “The Chinese regulatory and legal framework at times can be dynamic or susceptible to misinterpretation” he said. United Nations, Department of Economic and Social Affairs, Population Division 2015’
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