(Yicai) Sept. 9 -- China will allow private hospitals in eight cities and one province to be wholly foreign owned in a bid to further open up its healthcare sector, attract more overseas investment, and better meet patients’ medical needs.

The areas are Beijing, Fuzhou, Guangzhou, Nanjing, Shanghai, Shenzhen, Suzhou, Tianjin, and Hainan province, according to a notice issued by the Ministry of Commerce, the National Health Commission, and the National Medical Products Administration on Sept. 7.

The new policy only applies to hospitals in non-traditional Chinese medicine, the notice said, adding that more information about specific conditions, requirements, and procedures will follow later.

The move demonstrates the Chinese government's determination to further open up the healthcare sector and paves the way for foreign institutions to invest in hospitals in China, a private hospital manager told Yicai.

The country’s healthcare sector has been evolving rapidly due to increasing demand, an aging population, and the need for advanced medical services. The move to allow wholly foreign-owned hospitals is part of a broader effort by China to modernize its healthcare system and attract foreign investment into high-tech sectors, including biotechnology and regenerative medicine.

Introducing advanced medical institutions and innovative therapies will benefit patients and promote the development of the country’s medical sector, said Zhu Tongyu, vice dean of Shanghai Medical College at Fudan University.

Demand for high-end medical services is growing, especially in the fields of complex and rare diseases, regenerative medicine, and post-stoke rehabilitation, the founder of a health management organization told Yicai.

High-end private hospitals in China are mainly operated by foreign companies together with Chinese firms. Allowing overseas businesses to wholly own hospitals in China means that they can introduce their own systems, concepts, technologies, and equipment.

However, the success of this new ownership model will depend on whether foreign institutions can secure policy support, the health manager’s founder said. Challenges remain in coordinating different national regulatory standards and simplifying approval processes for new therapies, Zhu noted.

As of the end of last year, China had nearly 1.1 million medical and health institutions, including 38,355 hospitals, according to the National Health Commission. Of them, 11,772 were public hospitals and 26,583 were private.

The new policy notice also said that foreign companies will be allowed to engage in the development and application of human stem cell, gene diagnosis, and treatment technologies in free trade zones of Beijing, Shanghai, Hainan, and Guangdong province, which will then be available nationwide.

Overseas firms joining this pilot program will have to comply with relevant Chinese laws and regulations, including those on human genetic resources management, clinical drug trials, registration, marketing, production, and ethical review, the notice said.

Editor: Futura Costaglione