Chinese property and investment company Wanda Group is jumping on the healthcare bandwagon on the mainland with an investment of $2.3 billion that it will use to build three private hospitals in Shanghai, Chengdu and Qingdao that will be managed by Britain's International Hospital Group (IHG).Wanda Chairman Wang Jianlin
Wanda's chairman and China's richest man, Wang Jianlin, said the investment would help China meet "the growing healthcare needs of the country's affluent population" and help the sector by bringing in foreign talent, according to a Reuters report.
Wanda and IHG also signed a 10-year agreement under which IHG will be Wanda's exclusive partner on all hospital developments worldwide, the companies said in a statement.
"Further to September's UK-China Health Policy meeting in London attended by Vice Premier Liu Yandong and Minister of Health Li Bin, IHG is delighted to strengthen its relationship with Wanda Group and reinforce the China-Britain commitment of working closer together to help the global healthcare challenges," Chester King, IHG Asia's chairman, said in a company release.
The first hospital covered under the $2.3 billion pact is already under construction and should be finished by 2018 while the two other facilities will start construction in Q1 2016, according to the Reuters report.
IHG has healthcare projects in over 50 countries, according to its website, and said it will bring in foreign specialists and directors for the three hospitals covered under the deal.
As China's population ages and the country's people spend more on healthcare, the country is starting to see increased investment in private healthcare facilities because state-run hospitals are overcrowded, often understaffed and mistrusted by much of the population.
Foreign companies are taking seizing the opportunity and moving into the country. U.S.-based Chinaco Healthcare, Germany's Artemed Group, China's Shanghai Fosun Pharmaceutical, TPG Capital Management and property developers China Vanke and Evergrande Real Estate Group have all made substantial investments in the country's healthcare system.
Chinaco for example, started admitting patients in July to its new 500-bed facility in Cixi, China, which is 90 miles from Shanghai and is a joint venture between Chinaco and Cixi's city government. In 2014 Columbia Pacific Management said it would invest $200 million in two hospitals that would be 100% owned by the U.S. company in addition to the three "senior living" facilities it operates in Beijing and Shanghai.
McKinsey said in 2012 that China's healthcare spending will reach $1 trillion by 2020.
- here's the release from IHG
- here's the report from Reuters