|OVERVIEW OF CHINA||HEALTHCARE IN CHINA||DOING BUSINESS IN CHINA|
The People's Republic of China is the most populous countries in the world, with a rich history spanning back more than 4,000 years. After its transition to a market-oriented economy implemented by Deng Xiaoping, China’s econmic development has increased fourfold at the debut of 2000 with an average of 10% GDP growth over the last 30 years.. China’s economy is based on private property ownership, being a prime example of state capitalism. China has the world's second-largest economy measured by nominal GDP and is one of the world’s top exporters, attracting record amounts of foreign investment. With it, many of the Chinese people are experiencing an improvement in the quality of life; China’s middle-class population and the number of (US dollar) billionaires) have both grown. Since Xiaoping’s economic reform, hundreds of millions of people came out of poverty, from 64% of people living on US$ 1 per day to 10% in recent years. With its impressive economic growth, the population is dealing with a rising consumer inflation, as well as a high level of economic inequality. 
By the end of 2012, 52.6% of China’s population or 712 million was living in urban areas, a sharp increase from 26% in 1990. According to current projections, this percentage is expected to reach 70% by the year 2035. Currently there are around 160 cities in China that have a population of over 1 million people. 
China’s growing population of over 1.3 billion and its shrinking natural resource has made the government react through a family planning policy aimed at curbing the population’s growth rate. The “one child policy” that will be maintained until 2020 allows only one child per family, having already prevented 400 million extra births. This low fertility puts China on 152nd position worldwide in terms of population growth, with 0.48% in 2012, well below the replacement level of 2.1.
According to 2012 data from the World Bank, China has a younger population than Japan, the United States, Germany or France, with only 9% of the population over 65 years. Based on numbers from the Chinese government, this percentage is expected to increase by 2025 to 16.4% or 234 million seniors. Currently, China has one of the biggest shares of working age citizens (73%) among other large economies such as India (65%), Brazil (68%) or the United States (67%). 
Over the past decades, China has experienced a huge improvement in terms of life expectancy at birth, rising from an average of 45 years for women and 41 for men in 1960 to 75 for women and 72 for men in 2011. Despite these improvements, China has yet to tackle its widespread pollution problem that has shown to negatively affect life expectancy by as much as 5 years in the north of the country. These numbers are similar to those of Brazil, with 70 years life expectancy for men and 77 women and lower than India’s (64 – men, 67 – women), but smaller than Japan (79 – men, 86 – women) or the US (76 – men, 81 – women). 
China is the second largest economy by nominal GDP and by purchasing parity after the United States. With an average of 10% for the past three decades, China also has the fastest growing major economy. In terms of gross domestic product, China ranks third being overtaken by the European Union and the US, with a GDP twice as higher. China’s GDP overtook that of Japan in 2010 and is on track to become the largest in the world in 2020. 
A GDP per capita of only US$ 6,091 put China on the 90th position out of all 190 countries surveyed by the World Bank. This number almost doubled from 2008, when it stood at US$ 3,413. This growth does not necessarily translate into a higher quality of life, but is mostly due to the fast-rising yen. Poverty reduction remains an important challenge for the Chinese government as about 128 million or roughly 9% of its population still lives under poverty line, a number surpassed only by India.
China is the world’s largest exporter and second largest importer of goods, as well as the largest manufacturing economy worldwide. In terms of medical devices, a study by China’s Chamber of Commerce for Import & Export of Medicines and Health Products valued imports and exports of these products at US$ 30 billion in 2012, noting a 13% increase from the previous year. Most of the imports come from the European Union (37.6%) and the United States (32%), while the most imported devices were ultrasonic diagnostic instruments, tomography apparatus and magnetic resonance imaging devices. With 36,7%, Shanghai is the city in China that retains the largest share of the medical device import market. 
China has active free trade agreements with Pakistan, Chile, New Zealand, Singapore, Peru, Hong Kong, Macau, Costa Rica, Iceland, Switzerland and the Association of Southeast Asian Nations (Brunei, Cambodia, Indonesia, Laos, Malaysia, Myanmar, Philippines, Singapore, Thailand & Vietnam). China is also negotiating agreements with the Gulf Cooperation Council (Bahrain, Kuwait, Oman, Qatar, Saudi Arabia, and the United Arab Emirates), Australia and Norway.
China’s healthcare system is currently undergoing a major reform that aims at making health services more affordable for its poor population in rural areas. As a result, there has been a rapid increase in health care expenditures in recent years, at a much higher rate than GDP, from 9.41% in 2002 to 12.49% in 2012. The New Rural Co-operative Medical Care System (NRCMCS) started in 2005 sets the annual medical insurance cost to 50 yuan (US$7) per person, out of which 10 yuan is paid by the patient, and the rest is covered equally by the central and provincial governments. Participation is voluntary but already more than 800 million people or 99 % of China's total rural population have access to the insurance system, up from 45% in 2006. This system is overseen by the Ministry of Health of the State Council oversees health systems, while most of major hospitals are run by the government.
Health spending in China is expected to reach US$ 1 trillion in 2020 from $386 billion in 2011, as the population becomes older and the government will invest more in a broader insurance coverage for its citizens. This is set to make China the second biggest healthcare market worldwide, after the USA. 
China’s health care spending per capita (US$ 278 in 2011) has increased almost 200% from 2006 as the government has injected $125 billion with the launch of the NRCMCS program. Compared to the OECD countries, both China and India ($59) spend less than 10% of the OECD average on healthcare, staying behind other economies such as Russia, Brazil or Mexico.
The percentage of healthcare costs that is covered by the Chinese government has been steadily increasing in the past decade, from 35% in 2001 to 56% in 2011, representing a 57% increase. This increase in spending reflects China’s plan to restructure is healthcare system that in 2011 covered 95% of the population. 
With the beginning of government subsidized health insurance in 2011, private spending as a share of total health spending started a gradual decline, from 65% in 2001 to 44% in 2011. Private spending represents less than half of total health spending, similar to the USA or Brazil but lower than Japan or other leading European economies.
China has a small market for private insurance, therefore out-of-pocket expenditure tends to be relatively high. Out-of-pocket spending decreased from 93% in 2001 to 79% in 2011 but remains high, comparable to countries such as India (86%) or Japan (82%).
With an estimated value of US$ 20 billion in 2011, China’s medical device market is the fourth largest worldwide, behind the USA, the European Union and Japan. More than 70% in the market fall into one of these four categories: diagnostic imaging devices, medical supplies, orthopedics and implanted medical devices and dental. The Chinese market is heavily dependent on imports from the United States, Japan and Germany to supply its hospitals, as much as 70% of devices being foreign made, with a higher percentage for high-tech products. With an aging population, an increase middle class and more and more private hospitals, China’s medical device market is estimated to grow 15-20% annually over the next five years. 
2009 data from the World Health Organization show China had 1.46 physicians and 1.51 nurses for every 1,000 people. These numbers are far below the US (2.4 physicians and 8.2 nurses per 1,000 people), Japan (2.14 physicians and 9.85 nurses) or the EU average (3.3 physicians and 8 nurses), but higher than India, with 0.65 physicians and 1 nurse per 1,000 people. 
In terms of hospital beds per 1,000 people, China with 3.8 beds is ahead such countries as Brazil (2.3 beds), India (0.9) or the USA (3) but falls behind the European Union average (5.8) and Japan (13.7).
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2011 data, except for India (2005) & USA (2010)
Doing business in China
China’s socialist market economy is the largest in the world by nominal GDP and has the fastest growing rates out of all major economies. This has been achieved starting the 1970s, through fiscal decentralization, a liberalization of prices, the development of stock markets and the growth of the private sector. A large part of this growth comes from Special Economic Zones of the People's Republic of China (such as Shanghai or Tianjin), where there are more flexible government measures and free market-oriented policies in place. With a high inflation, an expanding property price bubble and economic slowdown in Europe in recent years, China’s GDP growth is slowing down, to less than 8% in 2012. With the adoption of the 12th Five-Year Plan in March 2011, the Chinese government aims to continue economic reforms and make the economy less dependent on exports by developing an internal market. Its goal is to quadruple the GDP and double the per capita GDP by 2020, with an ultimate goal of becoming a fully developed nation by 2049. If current trends continue, the World Bank estimates that China will become the world’s largest economy by 2030.
According to The Global Competitiveness Report, China is ranked 29th in the Global Competitiveness Index for 2013-2014, behind the USA, Germany, Japan or Singapore. A poorer ranking than other leading economies is reflected also in the ease of doing business, where China is ranked 91st by Doing Business, below the regional average, but ahead of Brazil and India.
There are 5 documents required to import into China, the same as Japan and 3 less than the regional average; the USA and the EU also require 5 types of documents to import. 
- Bill of Lading
- Certificate of Origin
- Commercial invoice
- Customs import declaration
- Packing list
The import of products into China takes an average of 24 days. This number far exceeds the OECD high-income average of 10 days, as well as the regional average (22 days). This timeframe exceeds as well that of Japan (11 days), South Korea (7 days) or the United States (5 days). 
All manufacturers are required to register their medical devices with the State Food and Drug Administration (SFDA) before entering the Chinese market. To import a medical device into China, three types of taxes are applied: a value added tax of 17%, a consumption tax (5% to 40% depending on the product) and customs duties (varies on the type of product). 
The Logistics Performance Index (LPI) is the average score for a country reflected by the efficiency of custom procedures, trade and transport related infrastructure, ease of arranging competitively priced shipments, quality of logistics services, ability to track and trace consignments and timeliness of shipments in reaching their destination. With an LPI of 3.52, China is ranked 26th, behind Japan, the USA, Germany, Singapore and Hong Kong. 
1 = Low; 5 = High
Enforcing a contract in China takes an average of 406 days, involves 37 procedures and will costs 11.1% of the amount claimed. This puts China on the 19th position when it comes to the ease of enforcing contracts, above Japan and the East Asia & Pacific regional average, but below the USA or the Russian Federation.
For a detailed overview on how the the Chinese renminbi (RMB) moved in recent years, please see the graphic below.
The total tax rate for companies in China is 63.7% of the company profits, a number higher than that of the USA (46.7%), Japan (50%) or India (62.8%) but lower than Brazil (69.3%). A company in China will make 7 tax payments per year that will require 338 hours to fill. Out of 185 economies surveyed by Doing Business, China is ranked 122th on the ease of paying taxes, below the regional average but above Japan, India and Brazil. 
Data compiled October 2013. Updated yearly
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