China has announced significant reforms aimed at attracting more foreign investment, including lifting restrictions on capital in the healthcare and manufacturing sectors. On September 7, 2024, China's Ministry of Commerce (MOFCOM) issued a circular that allows foreign investment in cell and gene therapy within selected free trade zones, while also permitting wholly foreign-owned hospitals in designated cities.
This move was quickly followed by the release of the “Special Administrative Measures for Foreign Investment Access (Negative List) (2024 Edition)” on September 8, 2024. Effective from November 1, 2024, the new list removes all restrictions on foreign investment in the manufacturing sector, creating new opportunities for international cooperation.
Lifting Restrictions on Manufacturing Investment
The new “Special Administrative Measures for Foreign Investment Access (Negative List) (2024 Edition)” reduces the number of restrictions on foreign capital from 31 to 29. Most notably, it eliminates all specific limitations on foreign investment in the manufacturing sector.
Previously, foreign investors were barred from participating in industries such as the printing of publications and the production of Chinese medicinal products. By lifting these bans, China aims to foster a more open and competitive environment in its manufacturing sector, encouraging multinational companies to invest and expand their operations.
Opportunities for Foreign Investment in Cell and Gene Therapy
In a significant development for the healthcare sector, foreign enterprises are now allowed to invest in cell and gene therapy within four key free trade zones: Beijing, Shanghai, Guangdong, and Hainan. These enterprises can engage in the research, development, and application of human stem cells, gene diagnostics, and therapeutic technologies. Once approved, these products can be distributed and used nationwide.
While this pilot scheme is currently limited to four regions, industry experts are optimistic about the future of China’s cell and gene therapy industry, expecting that it will eventually expand to other cities and regions with a strong foundation in biomedical research.
Wholly Foreign-Owned Hospitals Now Permitted in Major Cities
China is also opening up its healthcare sector to foreign capital by allowing wholly foreign-owned hospitals in several major cities, including Beijing, Shanghai, Shenzhen, and Guangzhou. These hospitals can operate independently, excluding traditional Chinese medicine and public hospital acquisitions.
Previously, foreign investment in hospitals was restricted to joint ventures. However, with China’s aging population and the government’s efforts to attract more foreign capital, this change opens up significant opportunities for investors in the medical field. The reform reflects China's commitment to liberalising its healthcare sector, allowing foreign capital to drive innovation and modernise healthcare services.
Conclusion
These reforms mark a major shift in China’s investment strategy, creating new avenues for foreign capital in both the healthcare and manufacturing sectors. By lifting bans and encouraging wholly foreign-owned enterprises in key industries, China is positioning itself as an increasingly attractive destination for foreign investors, offering fresh opportunities for growth and collaboration.
Woodburn Accountants & Advisors is one of China’s most trusted business setup advisory firms.
Woodburn Accountants & Advisors is specialized in inbound investment to China and Hong Kong. We focus on eliminating the complexities of corporate services and compliance administration. We help clients with services ranging from trademark registration and company incorporation to the full outsourcing solution for accounting, tax, and human resource services. Our advisory services can be tailor-made based on the companies’ objectives, goals and needs which vary depending on the stage they are at on their journey.
Talk to an expert
Schedule a 30-mins complimentary, no-obligation call to see how Woodburn can help you. Book a call with our Head of Business Advisory - Kristina Koehler-Coluccia.
Topics we can advise on include:
Company Registration
Cloud Accounting & Financial Reporting
Cloud Payroll Services
Tax & Audit Services
Recruitment
Employer-of-Record
Visa Application
Trademark Registration
Switch to Woodburn
Partner with Woodburn (cross referral)
Our calls are automatically scheduled via Zoom - or via Teams, WeChat or WhatsApp upon direct request.
Our advisory calls are available from Monday-Friday from 8am to 5pm CEST and Wednesday until 9pm CEST.