Healthcare spending is expected to hit $2.7t by 2029.
China’s ageing population and their access to new and advanced healthcare technologies will result in the continued growth of China’s healthcare market, according to a report by Fitch Solutions.
Healthcare spending reached a value of $877.01b in 2019 with per capita expenditure of $611.6. In 2020, Fitch Solutions calculated this spending to grow by 12.5% compared to last year. They also forecasted health expenditure to reach $2.7t by 2029.
The increase in demand is attributed to China’s one-child policy in 1979, due to which, the fertility rate fell to 1.65 by 2013. Though China eased the policy in that year, the fertility rate failed to grow significantly, resulting in a heavily skewed and ageing population .
With the elderly consuming a disproportionately large share of healthcare services, this rapid rise in the pensionable population will present pharmaceutical and healthcare companies with significant business expansion and revenue-earning opportunities, especially as the government tries to expand access to healthcare services. This, according to Fitch Solutions, will in turn bolster the attractiveness of the Chinese healthcare market.
Therefore, medical institutions are partnering with internet companies to offer online diagnostic services and follow-up consultations to meet the rapidly rising demand for healthcare and alleviate the problem of inaccessible and expensive public health services exacerbated by ageing demographics.
For instance, internet giant Alibaba announced that it will partner with Xi'an International Medical Investment to offer internet-powered medical services. Alibaba's Internet technology, mobile payment, big data, cloud computing and other expertise will be integrated with the company's medical institutions and research centers, according to Xi'an International. The co-operation includes building an internet-powered hospital and an artificial intelligence medical innovation lab.
Fitch Solutions also warned that the ageing population will pose major hurdles to China’s economic growth via two key channels – the shortage of labour force and the heightened spending on elderly care.
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