The economic rise and the one child policy that had been long in place in China have led to noticeable demographic changes in the country. The elderly population in China represents a sizeable portion of the total population. There are over 200 million people in China that are above the age of 60. It is these demographics and the burgeoning middle class have paved the way for a huge healthcare market in China.

There is rising demand for quality healthcare across the country. The government has responded by encouraging private investment in the sector along with intensifying public spending. The largely state-run healthcare system is looking forward to privatization.

The Chinese healthcare sector is a huge avenue for private investment. The state encourages private investment, both foreign and local. The enormous middle class demands high-end healthcare which the public sector was not able to provide. The market has responded to this need gap to some extent over the past few years. The number of private hospitals has increased substantially since 2008. By the end of 2016, there were 15798 private hospitals across China. These hospitals are mostly small institutions that focus on a healthcare niche such as cosmetic surgery, dental care, or orthopedics. These private hospitals make up 65% of the total specialty healthcare providers in China and have seen revenues grow by 20% over the last few years.

The government has taken certain steps to welcome private investment in the healthcare sector such as introducing a less stringent regulatory framework and making the business incorporation procedure simpler. A foreign investor looking to invest in the Chinese healthcare sector can now apply online through a centralized management system. The review of the application has to be completed and acknowledged within three working days by the authorities after which the process will become even quicker. Furthermore, the review process has been made much more lax as authorities will only run a nominal verification of the integrity of the information filed by the investors.

Recently, a local firm has raised funds amounting to almost $250 million to invest in the online Chinese healthcare sector. The firm, Tencent Trusted Doctor, is a subsidiary of the tech giant, Tencent holdings.

This is just one of the examples of the many local tech giants looking to invest in the enormous healthcare market to transform the healthcare landscape by leveraging technology. Estimates suggest that the local healthcare market will be worth over a trillion dollars by 2020.