In recent years, China's comprehensive policies to attract foreign investment have been made, among which the medical field and the biomedical field are one of the key areas. This article will briefly explain the latest main policies of relaxing foreign investment access in the medical field.

I.  Access rules for foreign investment were relaxed

 A negative list management system is implemented for foreign investment in China. The negative list refers to the special access management measures for foreign investment in specific areas.

 China has continuously relaxed access for foreign investment for the past years. From 2017 to 2021, the negative list for foreign investment in the national and pilot free trade zones has been revised for five consecutive years. The restrictions on these lists have been reduced from 93 and 122 to 31 and 27 respectively, and a series of major opening-up measures have been introduced in manufacturing, mining, agriculture and finance.

 With the consent of the CPC Central Committee and The State Council, the National Development and Reform Commission and the Ministry of Commerce promulgated the Decree No.23 on September 8,2024, publishing the full text of the Special Administrative Measures on Access to Foreign Investment (2024 Edition), which will come into force on November 1,2024. The 2024 edition of the national foreign capital access negative list reduced the restrictions from 31 to 29, deleting the "publications printing must be controlled by China", and "banned investment in processing technology applications of steaming, frying, burning, and calcination in Traditional Chinese Medicine decoction pieces and manufacturing of Proprietary Chinese medicine confidential prescription products”.

Manufacturing is the earliest field to open up in China. It is also the field with the most abundant market competition and the closest global industrial division of labor and cooperation. The abolition of restrictions on foreign investment in the manufacturing sector, including bio-medical manufacturing, fully demonstrates China's positive willingness to expand international cooperation and its clear-cut attitude to support economic globalization.

II.  Expand trials to open up the medical sector

In September 2024, a major breakthrough was made in China's opening-up policy in the medical sector. The Ministry of Commerce, National Health Commission and National Medical Products Administration issued the Notice on Pilot Work of Expanding Opening up in the Medical Field, which intends to allow the establishment of wholly foreign-owned hospitals (Except for Traditional Chinese medicine, excluding the acquisition of public hospitals) in Beijing, Tianjin, Shanghai, Nanjing, Suzhou, Fuzhou, Guangzhou, Shenzhen and Hainan. Besides, foreign-invested enterprises are allowed to engage in the development and application of human stem cells, genetic diagnosis and treatment technology for the product registration and manufacturing in China (Beijing) Pilot Free Trade Zone, China (Shanghai) Pilot Free Trade Zone, China (Guangdong) Pilot Free Trade Zone and Hainan Free Trade Port.

The establishment of a wholly foreign-owned hospital is not only the release of a policy, but also an important step in the diversification and internationalization of China's medical industry. China has the advantage of a large market, which is highly attractive to foreign countries, while foreign parties can introduce the whole system and concept, as well as cutting-edge technology and equipment into China, so as to provide diversified choices for Chinese patients, which may strengthen the competition between medical resources and promote the improvement of the overall medical service level.

III. The business environment for foreign enterprises has been improved

In August 2023, The State Council issued the Opinions on Further Optimizing the Foreign Investment Environment and Increasing Efforts to Attract Foreign Investment (Guofa (2023) No. 11). On the one hand, it guides more foreign investments in key areas such as pharmaceutical manufacturing, modern service industry, and high-tech, for example, encouraging pharmaceutical companies to build research and development centers in China, and to facilitate the clinical and declaration of foreign listed products in China accelerating the realization of the "zero time difference" between listing of new innovative products globally and in China. On the other hand, it also provides more opportunities for fair competition for foreign-invested enterprises to enter China, and this opinion proposes to protect the national treatment of foreign-invested enterprises, ensure that foreign-invested enterprises participate in government procurement activities according to law, further clarify the specific standards of "made in China", to redefine the "domestic" standards in medical device bidding and procurement. In addition, this opinion proposes to study and innovate cooperative procurement methods, and support foreign-invested enterprises to innovate and develop global leading products in China through measures such as first purchase and order.

IV. conclusion

In order to achieve a higher level of opening-up, China's foreign investment policies and related systems have been being updated at a faster pace, such as the recent series of measures to promote foreign investment in the medical and health sector. These have put forward higher requirements for foreign investors to understand the changes in relevant laws and policies. Foreign investors can further consult professional lawyers when they encounter specific problems to ensure the smooth development of their investment and trade in China.