Shanghai FTZ to get Artemed hospital

German healthcare operator signs agreement with 3 Chinese firms

German healthcare operator and medical product provider Artemed Group said on Tuesday that it would set up a hospital in the China (Shanghai) Pilot Free Trade Zone.

The group signed a framework agreement with investment company Silver Mountain Capital, Shanghai Waigaoqiao FTZ 3U-Development Co and Shanghai Waigaoqiao FTZ Healthcare Center on Tuesday. The hospital will be the first fully foreign funded medical institution to be set up in the 28-square-kilometer FTZ.

According to the agreement, the hospital will cover about 10,300 square meters in the pilot zone. The company also plans to set up seven leading medical centers, including a medical image center, a third-party independent diagnostics center, medical training center, research and development center, demonstration center, comprehensive outpatient center and inpatient center in the fields of cardiovascular diseases, muscle and bone diseases, celiac disease and lung diseases.

"The hospital will set an example for promoting the implementation of service sector's opening up in the FTZ. Meanwhile, it will help further promote China's medical service level and boost the country's high-end medical industry's development," said Li Yunzhang, deputy general manager of Shanghai Waigaoqiao Group.

The China (Shanghai) Pilot Free Trade Zone was launched in September 2013. It allows foreign investors to develop a series of sectors, including healthcare and medical sector in the zone.

The level of opening-up has been further elevated on the 2014 Shanghai Free Trade Zone "negative list", which defines areas that are off-limits for foreign investors in the zone.

In the medical sector, the updated version of the "negative list" has lifted the restrictions on the minimum investment of 20 million yuan ($3.2 million) and the maximum operation period of 20 years.

Zhu Min, deputy director of the China (Shanghai) Pilot Free Trade Zone Administration said: "The 2014 'negative list' further reduces the threshold for foreign investors.

The Artemed hospital in FTZ will undoubtedly set an example for more overseas medical bodies entering into China."

Zhu said they are also in talks with other foreign medical intuitions. Chinese media reported that these foreign medical intuitions include hospitals from Australia and Japan, for ventures in the fields of tumor and postoperative recovery treatment.

Many investors have expressed interest in opening hospitals in the Shanghai FTZ, as they see huge growth potential in China's healthcare market, said Zhou Mingren, vice-president of Shanghai Landseed International Hospital, the first totally Taiwan-invested hospital on the mainland, which opened for business in 2012.

In recent years, China has been steadily loosening restrictions for overseas investors in the medical sector. According to a document on speeding up the development of the medical sector by social capital, released by the National Health and Family Planning Commission at the end of 2013, the areas for investors from Hong Kong, Macao and Taiwan to establish wholly owned hospitals have expanded to all prefecture-level cities on the mainland.

Other qualified overseas investors can develop wholly-owned medical units in the Shanghai free trade zone and other special zones, it said.

Rainer Salfeld, executive director of Artemed said the company welcomes the considerable efforts taken by the government to promote people's health in China.

"We will support China's healthcare reform and introduce advanced medical knowledge, equipment and management experiences," he said. The Artemed Group operates eight hospitals and five elderly-care centers in Germany, serving over 50,000 inpatients and 150,000 outpatients every year.