Foreign Capital’s Wider Access to Health and Education

The foreign investors were allowed to enlarge their investments into health and education industries in China. It was the first time the foreigners were allowed to invest into the medical institutions.

On December 25, 2009, Chen Deming, Ministry of Commerce, said on the 2009 National Commercial Working Conference that the health and education industries would be more open to foreign investors in 2010.

Chen Deming also said that China would enlarge its export in 2010 and guide the foreign capital to take part in the green economic development. Meanwhile, the relevant polices would be issued to encourage the qualified foreign investment companies to be listed in the Chinese stock market.

From the end of 2008, the foreign direct investment (FDI) in China suffered decrease in row. At the beginning of 2009, the MOC said that new policies of recruiting foreign capital would be issued. However, till the end of 2009 no details were available.

Previously, Yao Jian, spokesman for the MOC, said in a regular press release conference that the new policies of recruiting foreign capital would include the balanced development of different regions and encouragement for Middle and West China to recruit foreign capital. Then, Chen Deming’s words stated the industry orientation for foreign capital.

As Chen Deming said, China would continue to open the service industry positively and steadily and encourage the foreign investors to found various kinds of medical institutions and professional education and training institutions. In addition, the government would guide the foreign capital to be put into the high-end manufacturing, high-tech industry, new energy, energy-saving and environmental protection.

Though the United Nations always listed China as the primary choice for foreign investors, the competition in global FDI became more and more furious, for which China had to face the competition from the other countries. On the one hand, there came out the voice requiring keeping the industrial capital inside their countries; on the other hand, the other developing countries began to contest for foreign capital with lower labor cost.

Chen Deming pointed out that the financial crisis instigated the worldwide industrial adjustment. If China could take this opportunity to give out conditions attractive for the foreign investors and devote itself to upgrading industrial structure, it would also win the game.

When interviewed by the journalists, Chen Deming said that the focus of utilizing foreign capital would be placed on the improvement of the utility level and change of the structure. In the manufacturing industry, the foreign capital would be treated in the same way the state-owned and private capital are treated in the production capacity and national macroeconomic policies. In another word, fair competition is available in these industries. In the health and education industries, the government would give more support to the foreign capital.

In truth, allowing foreign capital into the health industry just came down in one continuous line with the plan of medical reform.

In the 1990s, the foreign capital once tried to get into some medical fields, including the special outpatient and medical instruments. After 2005, though there were no written stipulations on foreign investments into medical institutions, real restrictions could be felt in this matter.

This was because of the discussion of the marketization medical reform, through which the result of unsuccessful medical reform was concluded. Therefore, the foreign capital slowed their paces into the health industry of China.

Till the end of 2008, the draft of new medical reform plan for soliciting advices was published, which contained the clause that “encourage and guide the social capital to develop the medical service, encourage the development of non-public medical institutions to form the medical system featured with pluralistic investment bodies and diversified investment patterns”.

Yu Danfeng, director of Ningbo Administration of Foreign Trade, Zhejiang, said that Ningbo had already seen the Sino-US joint medical institution established. In his opinion, it will be more convenient for the foreign investors to get into the health industry in the future. During the process of recruiting foreign capital, he realized that the standards of recognition of the foreign medical staff’s qualification in China need to be improved.