China Medical Equipment Industry Review 2017-2021

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The scale of industrial development has reached a new level

1.The scale of China medical device industry has exceeded 1 trillion yuan. In 2020, the operating income of China‘s medical device industry (over-regulation + under-regulation data) exceeded the 1 trillion yuan mark for the first time. From 629.7 billion yuan in 2015 to 1,039.2 billion yuan in 2020, the five-year compound annual growth rate is 10.54%, which is higher than the growth level of China overall manufacturing industry. The operating income of China medical device manufacturers above designated size increased from 400 billion yuan in 2015 to more than 600 billion yuan in 2020, with a five-year compound growth rate of 8.81%. The above-scale operating income accounts for more than 60% of the overall operating income. The development of China’s medical device industry has maintained a good momentum, and it is expected to achieve a compound annual growth rate of about 12.5% in the next five years. Under the COVID19, the demand for medical equipment such as personal protective equipment, rapid antigen test kits and life support equipment has increased significantly, driving the rapid growth of operating income in the past two years.

2. The number of medical device manufacturers in China has exceeded 20,000. In the past two years, due to the COVID-19, the number of medical device manufacturers in China has grown rapidly, exceeding 20,000 for the first time in 2020. From the perspective of the product categories of medical devices, the number of enterprises that can produce the first type of medical devices has increased more, the number of enterprises that can produce the second type of medical devices has grown steadily, and the number of enterprises that can produce the third type of medical devices has basically remained stable. Due to the novel coronavirus pneumonia epidemic, new manufacturers of masks, isolation gowns and isolation goggles have been added. In 2020, the number of production enterprises has increased significantly to over 26,000, an increase of about 10,000 compared with before the novel coronavirus pneumonia epidemic.

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3. The number of filings/first registrations of medical device products in China is close to 50,000. Deepen the reform of the medical device review and approval system, encourage medical device innovation, and continuously improve the quality and efficiency of medical device registration review and approval to achieve results. The number of first-time registrations of Class III medical device products has remained basically stable. In recent years, the number of newly registered Class III medical devices has been about 1,000 each year. The number of first-time registrations of Class II medical devices has shown ups and downs. In 2020, affected by the demand for fighting against the novel coronavirus pneumonia epidemic, the number of first-time registrations exceeded 10,000 for the first time in 2020, reaching 13,636. Due to the rapid increase in the number of first-class medical device product filings, the number of new filings in 2020 exceeded 35,000.

The profitability of the medical devices industry has steadily increased

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1. The total profit of the industry keeps rising. The total profit of medical device manufacturers above designated size has maintained a growth rate of about 10% in recent years, and will exceed 100 billion yuan in 2020.

2. The industry's profit margin remains high. The profit rate (total profit/operating income) of medical device manufacturers above designated size has gradually increased in recent years, from 10.44% in 2016 to 12.80% in 2019, and 17.45% in 2020, which is higher than the profit rate of the pharmaceutical manufacturing industry in recent years (about 13%). The profit margin of medical device manufacturers above designated size is still lower than that of developed countries, and there is still much room for improvement in the future.

Continuous optimization of industrial structure

1. The concentration of the medical device industry is gradually increasing. Judging from the total proportion of the top 20 listed medical device companies in China's operating income, it has increased from 5.81% in 2016 to 14.15% in 2020, and the industry concentration has increased year by year.

2. The proportion of high-tech enterprises has gradually increased. The number of medical device high-tech enterprises has grown steadily. The number of high-tech medical device enterprises in China has gradually increased from 777 in 2016 to 2,299 in 2020, accounting for about 8.7%, an increase of 3.6 percentage points compared with 2016 (5.1%).

3. The approved number of innovative medical devices is increasing year by year. The annual number of national innovative medical device products launched will increase from 10 in 2016 to 35 in 2021.

4. The medical device industry of China maintains a high degree of agglomeration. There are 51 medical device industrial parks at all levels recognized by governments and related department, including 28 national-level medical device industrial parks, 18 provincial-level medical device industrial parks, and 5 municipal-level medical device industrial parks. According to the quantitative analysis of 5 or more medical device manufacturing enterprises that can constitute an industrial park and the theme parks whose names include medical devices (mainly through the matching of the address of the manufacturing company and the address range of the park), the number of medical device industrial parks in China is from From 162 in 2016 to 307 in 2020.

Gradual improvement of international competitiveness

1. Foreign trade has grown steadily, driven by anti-epidemic supplies. In recent years, medical device import and export trade of China has been relatively stable. After the outbreak of the COVID19, epidemic prevention products have shown explosive growth, driving the growth of China medical device import and export volume. In 2019, my country's medical device import and export volume was 591.104 billion yuan, of which the export value was 311.952 billion yuan and the import value was 279.152 billion yuan. By 2020, the import and export volume will be 1,155.5 billion yuan, of which the export value will be 862.285 billion yuan and the import value will be 293.215 billion yuan.

2. Exports are mainly low-end products, and mid-to-high-end products are gradually infiltrated. At present, the export of China medical devices is still dominated by low-end products, and the export of medical consumables accounts for about 68%. With the increasing instability of the foreign COVID19, the export of domestic diagnostic equipment and IVD reagents has increased. In the future, the export of reagents may drive the internationalization of mid-to-high-end products of IVD companies.

3. The process of overseas deployment of domestic enterprises continues to accelerate. The stock of product registrations of Chinese medical device products in the United States, Canada, Singapore, and Australia was 5,484 in 2018, 6,345 in 2019, and 8,644 in 2020.

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