• Some high-end medical equipment are displayed at an expo in Guiyang, Guizhou Province, March 14.

Some high-end medical equipment are displayed at an expo in Guiyang, Guizhou Province, March 14. (Photo : www.wantchinatimes.com)

China's medical equipment firms are preparing to tap the high-end market sector and increase their share in the market dominated by leading foreign brands, such as Philips, General Electric and Siemens, among others.

The Chinese firms have reportedly gained the support of the government, which reiterated in its annual working report in May the need to nurture the development of domestic high-end medical equipment brands, which it has included in the national manufacturing industry development program called "Made in China 2025."

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The government said that the policy was aimed at helping domestic brands increase their share in the nation's expanding high-end medical equipment market. The equipment included CT (computer tomography) equipment, PET (positron-emission tomography)-CT scanners, and NMR (nuclear magnetic resonance) equipment.

According to Time Weekly, foreign brands such GE, Philips and Siemens that dominate the market have a combined share of 70 percent and they supply about 80 to 90 percent of cutting-edge medical equipment in China.

The report added that the dominance of foreign brands have forced some 16,000 domestic medical equipment manufacturers to focus their business mainly to the low-end sector. In 2014, when the total capacity of the market reached 276 billion yuan ($44.42 billion), local medical equipment manufacturers only sold an average of 17 million yuan ($2.73 million).

According to a report citing a GE official, the prices of imported medical equipment are often 50-100 percent higher over the price points in host countries since local middlemen charge higher costs. Because of this, patients also have to pay higher than what it regularly costs in the U.S.

Liao Xinpo, an inspector at the Guangdong Health and Family Planning Commission, reported that local hospitals get high kickback from purchasing imported medical equipment, which could reach 30-40 percent--20 percent higher than the kickback for the procurement of medicines.

When the government stepped up efforts to foster the development of the domestic medical equipment industry in 2013, a year after the market began to take off, the scale jumped 20 percent to $255.6 billion yuan in 2014.

To boost competitiveness, many domestic firms sought in-country mergers. The report said that there had been 35 mergers and acquisitions among local firms on the A-share market as of last Sept. 15, which account for 40 percent of the total merger and acquisitions in the medical sector.