Mishcon de Reya page structure
Site header
Main menu
Main content section

China healthcare's promise is boundless despite Covid-19

Posted on 1 May 2020

In March last year, surgeon Ling Zhipei was at home in China’s southernmost province of Hainan, a tropical island famous for white sand beaches and coral reefs. He spends half his time 3,000 km away in Beijing and a Parkinson’s disease patient there needed brain surgery. The doctor was unable to fly out.

What happened next made medical history. With the help of a 5G network, Ling manipulated robotic arms to implant a neurostimulator into the patient’s brain. After the successful operation, Ling told state media that the reliable 5G transmission enabled a “near real-time” operation: “You barely feel the patient is 3,000 kilometres away,” he said.

The breakthrough combining China’s global lead in 5G technology with growing prowess in advanced medicine, including robotic surgery, drove home the potential of China’s healthcare industry. In an age of COVID-19 and remote interaction, remote-control medicine will have even greater global appeal – and China has a genuine head start: from digital solutions to cutting-edge biotech and the new field of precision medicine, China is beginning to take leadership in the frontier medical technologies that will change our world.

“Dramatic progress has been achieved in the areas of innovative biologic and chemical drugs, biosimilars and immunotherapy,” Serena Shao, Credit Suisse’s head of China Health Care Research, said in a blog post. “Information technologies offer a second area in which China can further develop.”

Embracing challenges to build a healthy future

These opportunities are born of severe challenges. China’s billion-strong population is ageing fast and there are expected to be 300 million elderly Chinese with their attendant healthcare issues within a decade. Although China has 20 per cent of the world’s people, it accounts for nearly a quarter of total cancer cases, and 30 per cent of global cancer deaths. Obesity, diabetes and other lifestyle-related diseases are climbing.

Meanwhile, even as China powers ahead with futuristic biotech, it struggles with a primary healthcare sector stuck decades in the past. In 2018, China had 18 doctors for every 10,000 people, compared with 26 in the US and 28 in Britain. The highest-ranked hospitals are stretched: they comprise just 7.7 per cent of China’s medical facilities yet handle 50 per cent of outpatient visits. Hit by coronavirus, hospitals at Ground Zero in Wuhan (an up-and-coming tech centre) struggled with basic needs, let alone advanced diagnostics and pulmonary relief.

The government has made healthcare modernisation a national priority. In 2016, it launched “Healthy China 2030” – a far-reaching strategy to bring Chinese healthcare in line with the West. The COVID-19 pandemic, which exposed major vulnerabilities, promises to send the programme into overdrive – in a similar way the 2003 SARS outbreak sparked China’s first serious healthcare upgrade in decades.

Such burdens add up to significant opportunities. China’s healthcare modernisation is expected to translate into a $2 trillion market by 2030. Online medical care alone is poised to explode into nearly $30 billion business by 2026, says consultancy Frost & Sullivan – almost 20 times its 2016 size.

And China’s epic healthcare journey is not just about Chinese innovators. Global pharma players – from the UK to Switzerland to Boston’s biotech hub – will become partners, as China opens the floodgates to healthcare deregulation. Since 2015, China has enacted sweeping drug testing reforms, unleashing what Deloitte calls a “tsunami” of approvals for overseas companies.

A milestone was reached in December, when China amended its Drug Administration Law to streamline procedures for bringing new drugs to market. Beijing is expected to open the door to outside groups further as COVID-19 creates new healthcare demands.

Digital solutions for the post-COVID-19 world

Without knowing it, China has for years been inventing the paradigm of the COVID-19 “new normal” of social distancing, teleworking, and mobile app consumption of essential services. China’s consumers have been adopting game-changing technologies such as digital payments, online education, social messaging and superapps – which offer multiple services such as paying bills and buying insurance on a single platform.

Platforms such as insurance giant Ping An’s Good Doctor app hold the key to why the 2019 Future Health Index, from Dutch multinational Philips, shows China in a huge lead among 15 countries (including the US, Singapore and France) in implementing digital health-tech. In the survey, 97 per cent of Chinese healthcare professionals reported using mobile platforms – against a global average of 78 per cent.

The Philips survey found Chinese consumers among the most likely to choose a remote consultation for non-urgent care. The trend is likely to accelerate: Ping An Good Doctor, which matches consumers with doctors, saw a nearly 900 per cent increase in new users from December 2019, all before COVID-19 became news.

Deploying 5G networks for sensitive medical procedures – as Ling Zhipei did in Hainan – will enable doctors to treat safely highly-infectious diseases and send robots across earthquake rubble to perform life-saving emergency surgery.

In the current crisis, researchers at Tsinghua University created a robot designed for the frontlines of the virus outbreak. It performs ultrasounds, takes mouth swabs and listens to a patient’s body like a remote stethoscope.

China’s tech behemoths, meanwhile, jumped into the fray to invent COVID-busting solutions. E-commerce giant Alibaba developed an AI algorithm to analyse CT scans, claiming 96 per cent accuracy. Baidu, an Internet firm, deployed world-class AI research to build an algorithm that helps scientists understand the genetic makeup of COVID-19, boosting efforts to produce a vaccine.

The next biotech superpower

China’s biotech sector does not match its digital healthcare excellence. According to scientific journal Nature, China’s biotechnology pioneers, such as BeiGene and Zai Labs, are still better at producing refinements to molecules discovered in the West – and testing them on China’s massive population – than creating blockbuster drugs.

But the picture is changing. China’s brain gain from returning Western-trained scientists continues apace, with a host of startups tackling medicine’s biggest challenges. These include immunotherapy – which stimulates natural defences against tumours – and gene therapy – which seeks to treat diseases through genetic manipulation.

Innovation, says Credit Suisse’s Shao, is bringing Chinese biotech into a “golden age” – while a recent article in Nature Biotechnology (a Nature publication) heralds the emergence of “the next biotech superpower”.

“China is set to challenge the pre-eminence of the US drug market,” says the Nature Biotechnology article. “Government reforms, massive private and public investment and returning expatriates have transformed the Chinese sector … auguring profound changes for the global biopharmaceutical market.”

As recent proof of outside interest, pharma giant AstraZeneca last year teamed up with a Chinese investment bank to launch a $1 billion biotech VC fund for Chinese startups. Nature Biotechnology, meanwhile, reports that Chinese biotechs raised $2.9 billion in venture capital funding in 2018, more than twice the 2017 amount. The figure surpassed the amount raised by European biotechs for the first time.

The message is clear: as humanity faces one of its gravest collective challenges, China is poised to play a vital role both today and in the future. “With proactive government support, a billion-patient market and a motivated workforce, China just might challenge the hegemony of the US biotech sector,” says Nature Biotechnology. “This is good news not just for China, but for the world.”

How can we help you?

How can we help you?

Subscribe: I'd like to keep in touch

If your enquiry is urgent please call +44 20 3321 7000

I'm a client

I'm looking for advice

Something else