Medical device exports have shown significant growth, while high-end medical device exports remain sluggish

Medical device exports are increasing, but weaknesses remain.

Significant increase in the growth rate of medical device exports

On November 19, the State Council's website forwarded an article from the People's Daily, which pointed out that in the first 10 months, China's total import and export value reached 25.63 trillion yuan, a year-on-year increase of 2.4%, of which exports reached 13.99 trillion yuan, an increase of 4.9%.

Against the backdrop of sluggish global trade and investment, and in the face of a challenging and uncertain development environment, China's import and export volume has remained generally stable, its structure has continued to optimize, and its quality has steadily improved.

In the first 10 months, general trade imports and exports, which have longer domestic industrial chains and better reflect China's independent foreign trade, increased by 4.8%, 2.4 percentage points higher than the overall growth rate of foreign trade, with exports reaching 8.14 trillion yuan, an increase of 8.5%. Exports of integrated circuits, photovoltaic products, electricity, and medical devices were all higher than the average.

Company data provides the most intuitive view of the foreign trade situation.

“We recently won a bid in India worth over US\$20 million, and there may be several more large export orders at the end of the year, which are currently under negotiation.” Speaking about the company's export situation this year, the chairman of a medical device company in Hubei said, “The order growth was expected, but the speed of growth was unexpected.”

The company's growth is due to years of investment in R\&D. In the first three quarters of this year, China's import and export volume reached 7.01 trillion yuan, 7.66 trillion yuan, and 8.24 trillion yuan respectively, showing a steady increase quarter by quarter.

Strong momentum compared to other countries

Historically, double-digit growth rates have been commonplace for China's foreign trade. The current growth rate of foreign trade has slowed compared to the past.

Experts believe that evaluating the growth rate of foreign trade requires not only looking at domestic indicators but also global data; not only at the total volume but also at the intrinsic quality.

In comparison, although China's foreign trade growth rate has slowed, it still leads major global economies, and its position as the world's largest goods trading nation has been further consolidated.

For both parties involved in foreign trade, one party's imports are another party's exports. If one market performs poorly and imports decrease, the other party's exports will inevitably decrease as well.

The World Trade Organization recently released data on the export situation of major global economies in the first eight months of the year. In US dollar terms, US exports fell by nearly 1%, Japan's by nearly 4.8%, South Korea's by nearly 10%, and other major exporting countries also experienced varying degrees of decline, with only China maintaining growth.

Weak exports of high-end medical devices

According to publicly available data, China's medical device exports are mainly concentrated in the Pearl River Delta and Yangtze River Delta regions, with Guangdong, Jiangsu, and Zhejiang provinces accounting for 60% of China's total exports.

In addition, among the top ten exporting provinces, except for Shanghai and Liaoning, the export value of the remaining provinces has increased significantly, with Hubei, Shandong, and Anhui provinces seeing export growth exceeding 10%.

It is understood that although export value has increased, China's current medical device exports are still dominated by low-value consumables and mid-to-low-end products, with the industry heavily reliant on low-cost factors such as raw materials and labor.

The top ten export products, mainly massage and health care appliances and medical consumables and dressings, account for 44.5% of China's total medical device exports. Among them, massage appliance exports increased by 9.58% year-on-year, reaching US\$2.292 billion.

In recent years, China's high-end medical device industry has developed rapidly thanks to government support and corporate efforts, especially in the field of imaging diagnostic equipment, where import substitution has been gradually achieved. Some products, such as ultrasound and monitoring equipment, are also gradually gaining influence in the international market.

However, in the field of large-scale equipment such as CT and MRI, due to the long-term monopoly of the global market by multinational corporations, the technological level and comprehensive performance of China's high-end products still lag behind developed countries, with shorter clinical use times and lower international market recognition, resulting in a weak export performance and a long way to go in internationalization.

With the continuous upgrading of the industrial structure, medical device products are developing towards customization and high added value, and the development of new technologies such as early screening technology, artificial intelligence, 3D printing, and medical robots is bringing about a revolutionary change to the medical market.

References: Ren Fang. The Long Road Ahead for High-End Medical Device Exports. China Pharmaceutical News. 2018.03.15, p. 003