Growth in the medical device business in China is a mixed blessing, according to Chang-Hong Whitney, president of Whitney Consulting Ltd. "There is a belief that the country is growing too fast for its infrastructure," she said in a presentation entitled "China: Opportunities in an emerging giant," March 9 at HealthPACK 2007 in New Orleans. "But China has $1 trillion in foreign currency reserves, so it has the money to take care of this."
Whitney runs the international consultancy with her husband. The company has offices in China and in Littleton, MA, and has been consulting on business in China for 13 years. She says that despite differences in culture, business styles, management, legal, and regulatory matters between the United States and China, there are ample opportunities in China for packagers of pharmaceuticals and medical devices. Today, she says, China has 175,000 healthcare facilities and 10,000 medical device manufacturers, with 14%- to 15% annual growth forecasted in the medical market. Her slides showed a Frost and Sullivan projection that China will represent the second-largest medical device market by 2010.
A key challenge in China's growth will be to expand business opportunities westward from the country's eastern seaboard. In cities such as Shanghai and Hong Kong, business practices are more advanced and open to foreign operations. Whitney advised companies to set up a WFOE (Wholly Foreign Owned Enterprise) when starting a business. "Conduct due diligence research about business partners in China, learn local laws and regulations, tax structures, costs for materials and labor, regional political influences, and at least try to speak some Chinese to help break the ice," she said. "Many Chinese people speak English, but may not understand you that well."
Overall, Whitney said "packaging is at the end of the Chinese product development process. Compared with the developed countries, Chinese packaging lags behind in terms of technology, products and quality. Industry and technical standards are insufficient and inadequately enforced. Regulatory requirements are lacking as well. They're very far behind now, but that's not where they're going to stay."
--By Jim Butschli, Editor
