Trade pact opens health door to China
Sales of Australian drugs and health services in China are expected to expand following the relaxation of tariffs and other barriers under the terms of the Australia-China Free Trade Agreement.
While the detailed text of the treaty is yet to be publicly released, it includes the elimination of tariffs of between 3 and 10 per cent on Australian pharmaceuticals, as well as provisions that drop joint-venture requirements, allowing for the establishment of wholly Australian-owned hospitals and other health services in the giant country.
China’s rapid economic development in the past three decades has transformed the country into the world’s second largest economy.
Economic growth has dragged millions out of poverty and driven the emergence of massive, and expanding, middle class.
Already, China has become Australia’s largest offshore market for pharmaceuticals – last year, sales reached $559 million.
National Australia Bank Health General Manager Nehemiah Richardson said the trade agreement would also open up rich opportunities for exporters of health services.
“With the FTA permitting wholly Australian-owned hospitals and aged care institutions to be established in China, there are suddenly many new prospects on the horizon for Australian health and aged care businesses,” Mr Richardson said.
“The FTA provides Australian hospitals, aged-care and pharmacy businesses the opportunity to leverage their Australian know-how and capability across Asia.”
Ramsay Health Care Chief Executive Chris Rex told The Australian Financial Review said that although his company was currently pursuing a joint-venture with China’s Jinxin Group to develop five hospitals operating 2300 beds in Chengdu, the trade pact was “a favourable development”.
“China has favourable demographics for health care, with a population of 1.3 billion, a growing middle class and an ageing population,” Mr Rex said.
In an attempt to allay concerns the trade deal could include provisions which hamper the ability of the Australian Government to implement public health measures that might impede commercial interests, Trade Minister Andrew Robb said the pact included “strong safeguards to protect the Australian Government’s ability to regulate in the public interest…in areas such as health, safety and the environment”.