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China's Rule on JV Hospitals Becomes Effective
China has renewed administrative measures governing Sino-overseas joint-venture (JV) hospitals and clinics, hoping the sector's sound development can provide people a wide range of health care services.
According to a rule published by ministries of Health and Foreign Trade and Economic Cooperation, which becomes effective Saturday, overseas hospitals and firms can launch joint ventures in China after they get permission from the two ministries.
Solely overseas-funded hospitals are still not allowed in China. A JV hospital should be internationally advanced in equipment, technology and management, and should be able to provide service that local hospitals can not give, stipulated the rule.
Investment in a JV hospital should not be less than 20 million yuan (about US$ 2.4 million), stock shares of the Chinese side should not be less than 30 percent, and the term of JV hospitals should not exceed 20 years.
However, exceptions may be made for hospitals opening in China' s central and western regions, as well as remote and poor areas. Investors from Hong Kong, Macao and Taiwan will have to obey this rule when launching JV hospitals in the mainland.
China is reforming its hospitals by dividing them into not-for- profit and for-profit categories, and will exercise different fee- charging and taxation policies. Most JV hospitals are expected to fall into the for-profit classification.
Statistics show that there are about 200 JV hospitals and clinics in 19 Chinese provinces; however, only 18 hospitals and some 60 clinics have official permits.
An official with the Ministry of Health (MOH) said the rule aimed to "create a healthy environment for development of this sector."
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