Hainan medical tourism… the ‘Dubai’ of China?

 

The government wants Hainan to become a global tourist destination, and a raft of new policies are aimed at attracting foreign tourists and global investors. These include building luxury hotels and better air services.

International Medical Tourism Pilot Zone

Boao is a small town in eastern Hainan. However, the Hainan Boao Lecheng International Medical Tourism Pilot Zone is nationally significant.  The only one of its kind in China, it enjoys nine preferential policies granted by the State Council, including carrying out stem cell clinical applications without central government permission. The policies enable the hospital to conduct pilot applications in the sector.

The pilot zone offers international investors several preferential policies including:

  • Fast-track approval for new drugs, technology and medical devices
  • Extending up to three years the time foreign physicians can practice medicine
  • Allowing 100% foreign direct investment and ownership in hospitals, although at present foreign companies must have Chinese partners
  • Reduction of tariffs on certain medical devices and equipment

10% to be medical tourists, providing 20% of revenue

The goal is for the zone to become a leading medical and wellness destination in the next 7 to 10 years with first-class healthcare infrastructure and services. It is projected that within a decade, 10% of overnight visitors to the zone will be medical tourists, accounting for 20% of Hainan’s tourism industry revenue.

In 2017, 67 million tourists visited the island, double the visitor numbers of 2012, but only 1 million of them were foreign visitors. In May, China addressed the issue by launching 30-day visa-free visits for citizens of 59 countries, and the first regular direct flight to Europe took off in July. In the first six months of 2018, 946,000 tourists visited Hainan.

Foreign investment is slow

By 2020 the island will have a free trade pilot zone and by 2025, a free trade port, however it has so far struggled to attract foreign investors. Less than US$10 billion in foreign investment has been made in the five years up to 2017.

A “100-Day Campaign to Attract Businesses”, launched in May, has been designed to open-up the economy to foreign investors. The initiative ran until late August and was aimed at encouraging Fortune 500 companies to set up regional headquarters on the island. 100 overseas companies have shown an interest since April 2018 when the national government relaxed many rules.

Hainan will also grant permanent residence rights to skilled foreign workers and their family members, in an attempt to address the continuing shortage of professional talent in the province.

Build it… but will they come?

27 medical projects have been completed or are under construction in the pilot zone, and another 38 projects have passed medical technology appraisals. 8 projects are now open. All projects in the pilot zone are targeted to be completed within five years.

The zone aims to provide a wide range of health services, including some that are not readily available in China. Companies from China, the UK, USA, TAIWAN, Germany, Hong Kong and elsewhere are developing hospitals and clinics. Recent progress announced from some of the islands medical centres include:

  • Boao Evergrande International Hospital is a new cancer hospital in affiliation with Brigham and Women’s Hospital, of Boston, USA.
  • Another new hospital, Boao Super Hospital, offers high-end medical services to the Chinese public, and hopes to attract international medical tourists.
  • The Boaa International Hospital has also opened as a global centre for cancer treatment, regenerative medicine, genetic therapy and reproductive medicine
  • China Stem Cell Group Co Ltd, a Shanghai-based company, has opened a stem cell hospital in the Zone. The hospital is the only stem cell hospital in China.
  • Boao-Sino US International Hospital, scheduled to open in 2020, will have 200 beds and be based on American best standard practices.

The target of 5 million tourists, including 500,000 medical tourists, from Greater China, Chinese provinces, and other countries, is considered ambitious and will be difficult to achieve.

Legal changes mean that the Hainan Provincial Government now controls the Boao Lecheng International Medical Tourism Pilot Zone and can make local rules and laws without reference to central government.

The Chinese government hopes that preferential policies will mean that the zone becomes a popular destination for medical investment in China and for domestic and overseas medical tourists. The big question is, will prices, services and accessibility ultimately attract international medical tourists?

For an up to date analysis on the medical tourism sector in China, visit the IMTJ country report.

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