China healthcare a unique multidecade investment bet

The recent monetary and fiscal stimulus measures introduced by the central and local governments in China are boosting investment sentiment, and we believe these will further shore up the domestic market and present structural long-term opportunities.

Among the more promising sectors, we believe healthcare is a unique multidecade investment opportunity. Spending on healthcare had soared over the past decades from under 500 billion yuan ($68.46 billion) in 2000 to more than 6.5 trillion yuan in 2019. China's healthcare market is now the second-largest globally and in 2021 generated 10 trillion yuan in total revenue. China's healthcare sector looks set for a sustained revival in 2023.

Last year saw major contractions and a deceleration in growth rates of healthcare firms. In early 2023, the healthcare sector was positively impacted by the country's optimized COVID-19 policies as pent-up demand for healthcare services and medical procedures was unleashed. This presents a favorable growth trajectory for medical services, medical devices and companies involved in producing and distributing drugs and vaccines. A resumption in surgical and nonsurgical medical procedures benefits the medical services and devices subsectors. The pandemic has also meant an emphasis on health and medical security has been brought to the forefront. As a result, we are seeing increasing investment in healthcare infrastructure as well as more opportunities in drug and vaccine-related development.