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» 23/07/2009 [Company watch]
China Aoxing Pharmaceutical Corp. Receives Renewal of GMP Certification for Capsule Dosage Form of Pharmaceutical Products
» 15/03/2010 [Industry news]
Recordati S.p.A And Lee Pharmaceutical Announce Partnership For Zanidip(R) In China
» 26/10/2009 [Finance]
China Growth to Remain Fast in Fourth Quarter, Official Says
» 17/08/2009 [Industry news]
Chindex Posts Profit on Product Sales, Health Services
» 07/05/2010 [Industry news]
Hong Kong: Recall of all products manufactured by Quality Pharmaceutical Lab Ltd
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»01/03/2010 [Industry news]
China $125 Billion Health Spending Spurs GE, Philips Sales Boon

Wang Huijuan and her husband braved an overnight train ride to Beijing from Anhui province to see a doctor about her ailing intestines. The clinic back home could only take her temperature and blood pressure. The 10,000 yuan ($1,460) in life savings the couple brought to pay their costs may become an expense of the past after the Chinese government spends $125 billion to start a national health insurance system.

 
By Frederik Balfour (Bloomberg) -- Wang Huijuan and her husband braved an overnight train ride to Beijing from Anhui province to see a doctor about her ailing intestines. The clinic back home could only take her temperature and blood pressure. “They don’t have the equipment or expertise to treat more serious illnesses,” said Wang, who shivered in the cold as she waited in vain last week to see a physician at Beijing Xiehe Hospital. “We’ll come back at 4 a.m. tomorrow.” The 10,000 yuan ($1,460) in life savings the couple brought to pay their costs may become an expense of the past after the Chinese government spends $125 billion to start a national health insurance system. The benefits will be felt beyond the sick as General Electric Co. and Philips Electronics NV compete to sell imaging equipment and household savings are freed up to buy clothes and cars. More than 300 million Chinese are without health insurance, the World Bank says, and the remaining 1 billion have only partial coverage. In part to pay for those costs, Chinese save about one-quarter of their income each year and have accumulated as much as $5 trillion, said Stephen Green, chief China economist for Standard Chartered Bank Plc in Shanghai. Unlocking those savings is key to China’s plan to shift its economic drivers from exports and investment to domestic consumption after the global crisis and a 16 percent export decline in 2009 laid bare the country’s vulnerability to swings in external demand. “If they want to broaden out the economy they have got to be serious about building the social safety net,” said Stephen Roach, Hong Kong-based Chairman of Morgan Stanley Asia and author of “The Next Asia,” in an interview. “Health care is absolutely critical in accomplishing that.” People’s Congress The Politburo, China’s top decision-making body, called for that transformation to be sped up this year, the official Xinhua News Agency reported after a meeting of the group chaired by President Hu Jintao. The Feb. 22 meeting discussed the report that Premier Wen Jiabao will deliver March 5 at the National People’s Congress, in which the government will outline policy initiatives for 2010. More spending also would appease China’s trading partners, which are on the receiving end of a trade surplus that reached $196 billion last year, more than Malaysia’s gross domestic product. In addition to GE Healthcare China and Philips Healthcare China, the $41 billion being spent to build 31,000 hospitals and equip them with diagnostic and imaging equipment may benefit Chinese companies. Among them: imaging manufacturer Mindray Medical International Ltd. and vaccine maker Sinovac Biotech Ltd. Buying Stakes China’s focus on health care is spurring private deals. Eli Lilly & Co.’s venture-capital arm paid almost $15 million last year for about 15 percent of privately held CITIC Pharmaceutical Ltd., a drug-distribution company. Fidelity Asian Ventures, the Asia venture-capital unit of Bermuda-based Fidelity International, in 2008 took a stake in Shanghai-based China NovaMed Pharmaceuticals. Indianapolis-based Eli Lilly sees pharmaceutical distribution opportunities in the interior, where incomes are lower, as well as on the urban east coast, Darren Carroll, the company’s vice-president for new ventures, said in a phone interview. China’s pharmaceuticals market, including nutritional products and consumer drugs, will more than double to $110 billion by 2015 from $44 billion in 2008, Credit Suisse AG estimated in a November 2009 report. Device Makers Vicky Chen, who manages the $80-million closed-end China Healthcare Partnership Fund under the auspices of Martin Currie Investment Ltd., favors equipment and device makers that sell to lower-cost health providers. She has held Shenzhen-based Mindray, whose shares have risen 113 percent in the past 12 months, since the fund was launched in July 2008. Chen on February 2 increased her stake in Beijing-based Sinovac, the first company to have its H1N1 vaccine approved in China, during a secondary share sale. Sinovac shares have risen 472 percent in the past 12 months. It and Mindray are listed in New York. Chen’s fund was up 81.4 percent in the first 11 months of 2009, the most recent period available. “Government initiatives have lent tremendous support to the sector,” Chen said from Shanghai. “That is really opening up the market for subsectors, especially medical devices and equipment.” Stimulus Plan At the depths of the economic crisis, China’s GDP growth rate fell to 6.1 percent in the first quarter of 2009 compared with the year earlier, its lowest level in a decade. Growth rebounded to 8.7 percent for the year, thanks largely to government investment in infrastructure in a $586-billion stimulus plan unveiled in November 2008. China overtook Germany as the world’s largest exporter of goods last year, shipping $1.2 trillion. Its $143.4-billion trade surplus with the U.S. and $108.5-billion surplus with the European Union, according to China Customs data, have prompted leaders in those countries to press Beijing to allow the yuan to appreciate. The currency has been kept at about 6.83 to the U.S. dollar since July 2008. Already the world’s third-largest economy, China will overtake Japan this year, the International Monetary Fund says. Consumer spending accounts for 35 percent of China’s GDP, a percentage that has barely changed since the government made it a priority in the 2006-10 five-year plan. In the U.S., the world’s largest economy, consumption represents about two-thirds of GDP. ‘Simply Fragile’ “It’s simply fragile to depend on other countries to have demand,” said Standard Chartered China economist Jinny Yan in a telephone interview from Shanghai. “China cannot rely on exports to drive growth.” While China accounts for 20 percent of the world’s population of 7 billion people, it is responsible for just 3 percent of global consumption. The U.S., with about one-fifth of all global consumer spending, has just 5 percent of the global population, according to 2008 data compiled by Bloomberg. The Chinese government said in April that it would earmark $125 billion between 2009 and 2012 in additional health-care spending as part of a plan to offer universal basic health-care coverage by 2020. Two-thirds will go toward broadening access to health care for migrant workers, the unemployed and the elderly who aren’t covered by work-related plans.

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