In recent months, China has proposed and implemented several key reforms to its medical device regulatory framework, indicating a broader strategy to reshape how foreign and domestic medical products are evaluated, approved, and monitored. These changes reflect an ongoing effort by the Chinese government to strike a balance between encouraging innovation, bolstering domestic capabilities, and ensuring tighter regulatory compliance.
Eliminating the Country-of-Origin Approval Requirement
One of the most transformative proposals put forward by the National Medical Products Administration (NMPA) is the removal of the long-standing requirement that imported medical devices must first secure market approval in their country of manufacture before they can be submitted for approval in China. This shift is outlined in a draft version of China’s new Medical Device Administrative Law (MDAL) released in September 2024.
Under the current system, a device developed outside of China must be approved in its home country prior to Chinese regulatory submission. This policy has often been a roadblock for innovative technologies, particularly those still undergoing evaluations or facing delays in their domestic jurisdictions. The proposed MDAL revision would allow simultaneous regulatory filings in both China and the device’s country of origin. If enacted, this change could accelerate the entry of novel medical technologies into the Chinese market, making it more accessible for foreign developers.
However, it’s worth noting that this exemption would not apply to so-called “innovative devices,” which would still need to adhere to current approval protocols. The goal appears to be making China more attractive for general device makers while maintaining rigorous oversight over cutting-edge technologies.
Tighter Compliance with Chinese Product Standards
The updated draft of the MDAL also introduces an enhanced emphasis on adherence to China’s mandatory product standards. While some of these regulations resemble international benchmarks, others diverge and have, in the past, been used to limit the success of foreign entries. The proposed legislation clarifies which standards must be followed and increases the penalties for any violations.
Especially for high-risk devices such as implants, manufacturers will face tougher repercussions for compliance failures. Fines for unauthorized changes to registered products have been increased significantly, and companies may face not only financial penalties but also personal accountability for executives and their appointed local agents. Firms that fail to submit necessary change notifications or updated registrations could see serious legal consequences under the new law.
The draft also strengthens post-market surveillance and prohibits hospitals from using refurbished devices, reinforcing a broader effort to enhance patient safety and device reliability across the healthcare system.
Expanding Opportunities for Foreign Investment in Healthcare
Despite growing economic and political tensions, Chinese regulators are signaling a renewed openness to foreign healthcare investment. In November 2024, China unveiled two major initiatives aimed at reinvigorating international interest in its healthcare sector.
First, new policies were announced that would ease restrictions on research and development in gene therapy, stem cells, and associated fields within four key foreign trade zones — Beijing, Shanghai, Guangdong, and Hainan. Companies headquartered outside China can now engage more freely with Chinese R&D institutions and leverage local manufacturing capabilities, provided they adhere to Chinese regulatory requirements.
Second, the government announced that fully foreign-owned hospitals would be permitted in selected cities. These institutions would be authorized to introduce advanced medical technology and treatments from abroad, potentially enhancing the standard of care available to Chinese patients. The hope is that such partnerships will not only improve the quality of local healthcare delivery but also create new opportunities for joint ventures and co-development projects in the medical space.
These steps come in response to a sharp drop in foreign investment in China’s healthcare sector over the past several years, exacerbated by policy uncertainty and geopolitical friction. With these new incentives, China appears intent on reversing that trend and re-establishing itself as a viable destination for international healthcare capital and innovation.
Anti-Corruption Reforms Targeting Healthcare Businesses
In parallel with its market-friendly reforms, China continues to crack down on unethical behavior in the healthcare industry. In October 2024 , the State Administration for Market Regulation issued a draft document titled Compliance Guidelines for Healthcare Companies to Prevent Commercial Bribery Risks. This draft regulation represents a significant expansion of China’s anti-corruption efforts.
Unlike earlier anti-corruption measures that primarily focused on hospitals and medical professionals, the new guidelines broaden the scope to include corporate actors across the healthcare supply chain. The proposed rules outline clear expectations for internal compliance systems and suggest that independent third-party audits should verify corporate conduct.
The draft is divided into four sections. The first defines corporate responsibilities and emphasizes the need for comprehensive, third-party-validated compliance systems. The second outlines the core elements of a standard corporate compliance framework. The third highlights nine high-risk scenarios — such as offering free equipment or excessive hospitality to medical professionals — and provides strategies for managing these risks. The final section addresses the importance of reporting unethical conduct and establishing clear procedures for doing so.
While many multinational firms already have internal policies addressing corruption, the new guidelines introduce China-specific expectations and underscore the importance of localized enforcement strategies.
New Classification System for In Vitro Diagnostics (IVDs)
Another recent update comes from the Center for Medical Device Evaluation (CMDE), which falls under the purview of the NMPA. In May 2024, the CMDE released a new IVD Classification Catalog that came into effect on January 1, 2025.
The new classification system replaces the existing catalog and assigns a structured coding format to in vitro diagnostic reagents. The classification includes both a primary code — labeled as 6840-XX — and a secondary sub-category code, such as XX-XXXX. These codes will be selected based on the product’s intended use and specific diagnostic function.
For example, SARS-CoV-2 nucleic acid tests will be classified under 6840-01-01152. Companies must input the appropriate code during electronic regulatory submissions using the eRPS platform. If a suitable code is not found in the catalog, companies are allowed to use a placeholder code (6840-00-00000) and submit a classification request to the National Institutes for Food and Drug Control (NIFDC).
This review process, which requires a comprehensive product dossier, typically takes around four months. However, if the expert committee overseeing the process cannot reach a decision, the timeline becomes uncertain. This new system is expected to improve regulatory transparency and streamline the classification of complex IVD products.
Mounting Challenges for Foreign Device Manufacturers
Despite the regulatory reforms aimed at encouraging innovation and foreign investment, many overseas medical device companies continue to face significant barriers when trying to sell into China. A mix of pricing pressures, regulatory restrictions, and local competition has made it increasingly difficult for Western firms to maintain profitability in the Chinese market.
China’s widespread adoption of cost-control programs — such as Volume-Based Procurement (VBP), Diagnostic Intervention Packet (DIP), and Diagnosis-Related Groups (DRGs) — has slashed the reimbursement available for many foreign-made devices. In parallel, government policies are now placing stricter limits on how many imported devices hospitals can procure.
Another challenge is the push under the “Made in China 2025” initiative, which encourages foreign firms to set up local manufacturing facilities in order to remain competitive. While some global companies with highly differentiated products are still succeeding, many others are struggling to survive under the current pricing and procurement environment.
One especially high-profile example occurred when China added gene sequencing company Illumina to its Unreliable Entity List (UEL), effectively banning its exports to the Chinese market. This move followed allegations that Illumina had disrupted local business operations and may be linked to its perceived support for U.S. policies countering Chinese competition. While Illumina is currently the only life sciences firm on the UEL, the message is clear: foreign firms must tread carefully and align with China’s strategic objectives or risk exclusion.
Conclusion
These developments paint a complex picture. On one hand, China is liberalizing parts of its regulatory system to speed up device approvals and attract international investment. On the other, it continues to assert tighter control over market access, post-market oversight, and corporate conduct.
Companies looking to operate successfully in China’s medical device sector will need to adapt quickly to these changes — investing in local partnerships, ensuring strict compliance with evolving standards, and aligning with broader national policies.
Written by: Ames Gross – President and Founder, Pacific Bridge Medical (PBM)
Mr. Gross founded PBM in 1988 and has helped hundreds of medical companies with regulatory and business development issues in Asia. He is recognized nationally and internationally as a leader in the Asian medical markets. Mr. Gross has a BA degree, Phi Beta Kappa, from the University of Pennsylvania and an MBA from Columbia University.