Employing a raft of restrictive trade, financial, procurement, and insurance policies, Chinese authorities are increasingly insulating the country’s domestic medical device industry from foreign competition. Beginning in 2018, China began to require that a growing number of state-run hospitals buy domestically produced medical devices. Those that don’t can lose government insurance reimbursements and be subjected to lengthy audits of any foreign devices they import.
The restrictions have had a significant effect on the vast Chinese medical devices market, valued at more than $40 billion in 2019. The market shares of Chinese medical device producers are growing at a fast pace, while those of U.S. medical device producers (and other Western countries) are on the decline in China. At issue for foreign producers is access to the lucrative Chinese market. At issue for Chinese patients is the quality of the medical devices hospitals are permitted to use.