China Corporate Alert - China liberalizes foreign investment in medical services sector

On 26 November 2010, the State Council circulated the Opinions on Further Encouraging and Guiding the Use of Non-governmental Capital in the Establishment of Medical Institutions ("Opinions"). These were jointly issued by five key stakeholder departments, including the National Development and Reform Commission, the Ministry of Finance ("MOF"), the Ministry of Health ("MOH") and Ministry of Commerce ("MOFCOM"). The Opinions represent a significant policy shift. It seems that China is now ready to lift some of the barriers preventing foreign and domestic private capital from entering this traditionally sensitive sector. The Opinions also point to a significant levelling of the playing field for private medical institutions, which have hitherto been handicapped by not enjoying the same extensive set of tax breaks available to State-owned hospitals.

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