China

A lower Gdp, a higher healthcare expenditure

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According to figures and analyses released last summer by a variety of multi-national research companies as the Chinese pro-capita Gross domestic product will not manage to reach its short term expectations of growth, the pharmaceutical business will rocket up thanks to institutional initiatives

Roberto Carminati

As the International monetary fund observed last summer the Chinese economy is not going to manage to reach its pro-capita average Gross domestic product goals by the end of this year and it is possibly going to miss the target in 2014 too. In April the Imf stated that the Popular Republic’s Gdp was expected to grow by 8 percentage points in 2013; while expectations for next year were even higher: +8,2%. But Christine Lagarde’s authority changed its mind and figures, now predicting a 7,8% growth in the next months and foreseeing a further decline ahead with the +7,7% calculated for 2014. While the Chinese economy seems to be slowing down causing some turbulence and alarm on the global markets, the national government seems to be determined to meet its goals when it comes to improving the local healthcare system. Recent figures released by the London-based multi-national research firm Global Data show that by the end of the decade the Chinese pharmaceutical market will generate a 315 billion dollars value, rocketing up from 2012’s estimated 48 billion, thus cruising at a 26.5% Compound annual growth rate (or Cagr) for the next seven years. This sensational increase will allow China to become the second largest pharmaceutical market worldwide, with, as sources wrote, «surging revenue propelling industry value significantly closer to that of the United States», forecasted to reach 475 billion in 2020. There is a number of factors underlying and driving the upcoming boom and one if not the first and most important of those is the five years plan that Beijing launched to improve its healthcare system for the 2011-2015 period. Established in 2009 the institutional initiative will «add another 150,000 primary care physicians, build 2,000 new county hospitals, 29,000 new township hospitals and upgrade another 5,000 clinics and hospitals», as Rubicon Strategy Group’s managing director and founder Benjamin Shobert wrote in a recent article on the online pages of the China Business Review. Shobert also pointed out how this roadmap can open up new business perspectives and opportunities for operators worldwide, including vendors and distributors from the United States.

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