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Issuing Body: Ministry of Health Issuing Date: April 13, 2012 Effective Date: N/A
China's Ministry of Health has taken steps to further open China's healthcare market, releasing a draft version of changes to the Tentative Measures on Administration of Sino-Foreign Equity Joint Venture and Sino-Foreign Contractual Joint Venture Medical Institutions ("Medical Institution Tentative Measures"), which were jointly issued in May 2000 by the Ministry of Health and Ministry of Foreign Trade and Economic Cooperation, the predecessor to the Ministry of Commerce. The proposed new rules, known as the Administrative Measures of Sino-Foreign Equity Joint Venture and Sino-Foreign Contractual Joint Venture Medical Institutions ("Medical Institution Administrative Measures"), were released for public comment on April 13, 2012. While retaining the basic framework of the Medical Institution Tentative Measures, the revised rules would make several substantive and procedural changes in the establishment of joint venture medical institutions, such as increasing the minimum total investment to RMB100 million (RMB 50 million in central and western China), streamlining approval procedures, and allowing wholly foreign-owned medical institutions as well as nonprofit facilities.
The Ministry of Health and Ministry of Foreign Trade and Economic Cooperation issued the Medical Institution Tentative Measures in May 2000 (effective July 1, 2000) as part of China's World Trade Organization commitment to open the nation's healthcare service market. Those rules for the first time allowed foreign investors to establish hospitals and clinics in China, with Chinese partners, and subject to certain key limits. Foreign ownership, for example, was capped at 70 percent, and all facilities had to be for-profit institutions.
The 2011 version of China's Foreign Investment Industrial Guidance Catalogue, which became effective January 30, 2012, paved the way for changes in the healthcare industry, moving medical institutions from the "restricted" category to "permitted." In addition, the Opinions on Further Encouraging and Guiding Privately Owned Capital to Establish Medical Institutions, which were jointly issued in December 2010 by the National Development and Reform Commission, Ministry of Health, Ministry of Commerce, Ministry of Finance, and Ministry of Human Resources and Social Security, called for cancellation of the limit on foreign ownership percentages in medical institutions and for allowing qualified foreign investors to establish wholly foreign-owned medical institutions on a pilot basis.
Key Elements of the Revised Draft Measures
In their current form, the Medical Institution Administrative Measures would effect a number of important substantive and procedural changes:
The period for public comment on these proposed revisions to the Medical Institution Tentative Measures ended May 16, 2012. The Ministry of Health and Ministry of Commerce are now reviewing and interpreting those comments.
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