Why this is important to Wisconsin businesses: China’s aging population and the government’s focus on improving its citizens’ health are expected to heighten the need from medical device manufacturers, including those in Wisconsin.
China is the world’s second-largest health care market—behind only the U.S.—and its aging population is expected to see an increasing need for medical devices.
China’s population reached 1.4 billion as of Dec. 31, 2021, and 267 million people (18.9% of the population) are at least 60 years old. Meanwhile, as many as 300 million people suffer from chronic diseases such as stroke, heart disease or diabetes, China’s government says. The medical device market in China is expected to reach $195 billion by 2025.
Currently, 80% of the high-end, advanced technology in China is imported from other countries. That amounted to $50.2 billion worth of medical devices in 2021, and 24% of those imports came from the U.S.
The Chinese government has been working to improve citizens’ well-being and establish a tiered health care system across the country through a national strategy called Healthy China 2030. The plan includes building medical institutions and strengthening clinical trial capacity. At the same time, China has been focusing on medical cost controls, precision diagnosis and treatment, and disease prevention.
As a result of the changing demographics and China’s health care efforts, demand is expected to grow for orthopedic products, medical implants and devices such as digital CT scanners, digital X-ray machines, electrocardiograms, electroencephalography, MRI equipment, immunodiagnostics, gene sequencing and rapid diagnostic tests.
Wisconsin has a strong reputation for medical equipment and health technology. Scientific and medical devices produced the state’s second-highest export volume in 2021.
Wisconsin companies interested in exporting their products to China are advised to seek the appropriate distributors, with a highly skilled sales staff who can provide key support services such as operation tutorials, user guidance, and customer complaint resolution. For new exporters to China, though, the top, established distributors are not necessarily the best choice, as they may be less willing to accept new products that compete with their existing ones. More importantly, their agency terms may require a higher profit margin than those of smaller distributors.
Exporters are encouraged to take advantage of China's opportunities by focusing on sales volumes rather than margins. The huge market size in China means that even if the profit margin of individual products is not high, the overall profit exporters can achieve in the market is still considerable.