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China’s Hawaii gets a new identity – opening up major opportunities for western medical firms

China’s Hawaii gets a new identity – opening up major opportunities for western medical firms

China’s State Council recently cemented its demarcation of the southern tropical island of Hainan — often labelled ‘China’s Hawaii’ — as a pilot zone for international medical business. 

Its aim is to encourage not only international healthcare trade but innovation, research and experimentation. The State would ultimately like to build internationally renowned healthcare specialisations — as has Korea with cosmetic surgery, Japan with cancer screening and Thailand with dentistry – to become a medical travel destination. And this, in turn, is opening up huge opportunities for western healthcare and medical device firms with an eye on the huge Chinese market.

Regulation exemptions 

The State Council has, in essence, now relaxed medical regulations (by ceasing implementation of Article 11 of Order No. 650 in the Regulations on the Supervision & Administration of Medical Devices). These regulations previously required all imported Class II and III medical devices to be represented by Chinese entities and gain certification by the national bureau, the CFDA. 

Hainan is now exempt from this, with devices only requiring provincial-level FDA approval. 

This is potentially a really big deal. It’s typically taken at least 18 months to register new Class III devices in China, at a cost of between USD 100k and USD 300k. Registration in Hainan should now be far swifter and less expensive, at least when the new policy settles in. 

And, by using Hainan as a gateway, this should make importing devices to wider China easier, even though further applications are likely to be required and the exact process is, as yet, untested.

Special concessions 

Hainan Province has also introduced four major special privileges: 

1. Market access for medical technologies, devices and pharmaceutical products eased by special import tariffs for foreign companies — ranging from partial to full exemption of import duties or consumption taxes 

2. Special privileges for stem cell and related cutting-edge research projects for clinical applications

3. A relaxation of controls over certain medical approvals to encourage foreign capital investment and business operations

4. Permission for international organisations to host conferences and events in the province – while it’s previously been extremely difficult to get a licence to do so.

The Bo’ao Lechang Pilot  

To see how this might play out in practice, look at Hainan’s Bo’ao Lechang Pilot Zone as a demonstration project within the wider programme. 

It’s an initiative from the Hainan People’s Government focused on a 20 square kilometre area of the province, aiming to turn it into a hub for integrated medical services, scientific research, senior care, rehabilitation and health tourism. 

Policies aimed at foreign investors within the Bo’ao Lechang project include:

  • Fast-track approval for new drugs and devices
  • An extended practice period of up to three years for foreign doctors
  • Allowance of 100% foreign direct investment in, and ownership of, hospitals
  • Reduction of import tariffs on certain devices and equipment

New model of Chinese 'super hospital'

Harvard University’s Brigham Hospital, for one, has been quick to recognise the commercial opportunities here. It’s become a major backer in establishing the Bo’ao Evergrande International Hospital — a new model of Chinese ‘super hospital’ with the scope to innovate thanks to foreign investment. 

Brigham Hospital is advising the new Chinese institution, which will specialise in oncology, on hospital planning and healthcare network development, introducing new models of clinical diagnosis, treatment planning, remote consultation and patient referral.

There’s increasing appetite for US hospitals to expand into China like this, as recently reported in the Wall Street Journal. But it’s doubtful Brigham would have been able to do this under the previous regulations, when the process for a foreign organisation to set up a Chinese hospital would, at best, have been extremely cumbersome. Even under the new, more relaxed regime, finding the right Chinese partner is crucial (and something we help western companies to do). 

Huge opportunities 

So, with the national government’s full support, Hainan is taking big steps to encourage foreign investment in its medical sector. It’s resolutely building its own name so one day soon it may no longer be best known as China’s Hawaii, but China’s Hainan. 

And with this come huge potential opportunities for western healthcare businesses — whether they wish to sell to the Chinese market, manufacture in China, partner with a Chinese hospital or undertake research here.

Emma Hsu
About the Author

Emma Hsu

Emma Hsu is based in Intralink’s Shanghai office, helping western tech businesses to expand in China.    

For more information on how to explore opportunities in China, you can contact Emma on

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