1 Introduction to the Project

1.1 Project background

1.1.1 Product introduction

Medical devices refer to various equipment, supplies, materials, or other items used for preventing, diagnosing and treating diseases, or providing physiological function support for humans in vivo or in vitro, including testing reagents, medical hygiene materials, medical equipment, and medical software, etc. Medical devices, drugs, and diagnostic and therapeutic technologies are listed as the three pillars of health care.

Medical devices can be classified into the following categories based on their functions:

(1) Diagnostic equipment: such as X-ray machines, CT, Ultrasound, and magnetic resonance imaging, etc.

(2) Therapeutic equipment: such as surgical instrument, and various therapeutic instrument, etc.

(3) Rehabilitation equipment: such as walking aids, prosthesis, and orthopedic equipment, etc.

(4) Medical consumables: such as medical gauzes, surgical blades, and syringes, etc.

(5) Health-care products: such as thermometers, blood pressure monitors, and blood glucose meters, etc.

(6) Medical software: such as medical imaging diagnosis software, and medical record management software, etc.

Medical devices are widely used in various levels of medical institutions, hospitals, and clinics, etc., as well as various social welfare institutions and families.

Relying on the existing basis, the project creates a professional medical device industrial park in Dongfeng County, Liaoyuan City, integrating testing and inspection, research and development and incubation, and production and sales.

1.1.2 Market prospect

The medical device industry belongs to the field closely related to human life and health. Its market demand has strong rigidity and is not easily affected by significant economic cycle fluctuations. The stability of the industry is relatively high. With the global socio-economic development and changes in population structure, including aging issues, rising prevalence of chronic diseases, increased emphasis on health among the residents, and the improvement of economic level and consumption ability in developing countries, etc., the global medical device market has been driven to expand continuously. In 2023, the market size reached US$ 616 billion, with a year-on-year growth of 7.11%.

Table 1 Global Market Size and Growth Rate of Medical Devices from 2019 to 2023

Based on this stable growth rate, if the market environment does not undergo significant changes and continues to maintain the same growth rate, it is expected that the global medical device market size will have broken through US$ 700 billion by 2029.

Compared with the global medical device market, the Chinese medical device market is growing more rapidly. Driven by factors such as the improvement of residents’ consumption structure and national policy support, etc., the medical device industry in China has entered a stage of rapid development. Seeing from the demand side, as the world’s largest developing country, the aging population in China continues to increase, and the potential demand for medical treatment and health continues to rise; Meanwhile, with the rapid development of the market economy, the reform of the medical system continues to deepen, the coverage of medical insurance policies is gradually improving, and the ability and willingness of medical consumption among Chinese citizens are constantly increasing. However, on the policy side, multiple favorable policies of the state have opened up a green channel for the development of medical devices, encouraging product upgrades through technological innovation, promoting the rise of domestic brands, and achieving import substitution.

In 2023, the market size of medical device industry in China reached 1.25 trillion yuan, with a year-on-year growth of 17%. Compared with the global medical device market, the growth rate of medical device market in China was 2.4 times that of the global medical device industry, and the domestic medical device market had a broad development space.

Table 2 Market Size and Growth Rate of Medical Device Industry in China from 2019 to 2023

The three major trends of wearable devices, medical robots, and immersive technologies account for over 50% by influence, and the future medical device market may mainly revolve around these three trends, leading innovation and development of the industry. Other technologies such as 3D printing, medical Internet of Things (IoT), and artificial intelligence (AI), etc. will also provide significant support for the development of the medical device industry.

Table 3 Influence of Trend of the Top 10 Medical Devices in 2024

Since 2019, the export amount of medical instrument and devices has shown a fluctuating upward trend. The growth rate reached its peak in 2020, with a growth of 41.35% compared to the previous year. However, this high growth trend did not continue, with a sharp drop in growth rate to 4.00% in 2021, followed by negative growth, with the export amounts fluctuating between 120 billion yuan and 130 billion yuan.

Table 4 Export Amount and Trend of Medical Instrument and Devices from 2019 to June 2024

From the comparison of market concentration degree between Chinese and global medical device enterprises in 2023, the Chinese medical device market showed a relatively scattered characteristic, with income proportion of both the top 20 and top 50 enterprises being much lower than the global level. However, the global medical device market showed a trend of high concentration.

Table 5 Market Concentration Degree and Global Comparison of Chinese Medical Device Enterprises in 2023

Chinese medical device enterprises have an absolute advantage in terms of number, with over 36,000 enterprises, however, their average operating income is significantly lower than that of Europe and the United States. At present, there are a large number of small and medium-sized enterprises in Chinese market, with fierce market competition. However, no obvious industry giants have yet formed, and there is still a significant gap between the domestic medical device leader Mindray and foreign leaders. However, while maintaining a great number of enterprises, European and American enterprises have also achieved higher average operating income, indicating that there is still a significant room for development in China.

Table 6 The Number and Average Operating Income of Medical Enterprises in Europe, the United States, and China in 2023

To sum up, the project relies on the existing industrial base to construct a medical device industrial park and introduce medical device enterprises, which has a broad market prospect.

1.1.3 Advantageous conditions of project construction

(1) Policy conditions

In 2021, 10 departments including the Ministry of Industry and Information Technology, the National Health Commission, the National Development and Reform Commission, the Ministry of Science and Technology, the Ministry of Finance, the State-owned Assets Supervision and Administration Commission of the State Council, the State Administration for Market Regulation, the National Healthcare Security Administration, the National Administration of Traditional Chinese Medicine, and the National Medical Products Administration jointly issued the 14^th Five-year Plan for the Development of the Medical Equipment Industry, proposing that: by 2025, the advanced level of the basis for medical equipment industry and the modernization level of the industrial chain will have been significantly improved, the mainstream medical equipment will have achieved effective supply, the performance and quality level of high-end medical equipment products will have been significantly improved, and a comprehensive support capacity for public health and medical health needs will have been initially formed. By 2035, the research and development, manufacturing, and application of medical equipment will have been elevated to the world advanced level. China will have entered the forefront of innovation-oriented countries of medical equipment, providing strong support for guaranteeing comprehensive and whole-life health services for the people.

In December 2021, the Jilin Provincial Leading Group for the Pharmaceutical and Health Industry issued the 14^th Five-year Plan for the Development of the Medical Device Industry in Jilin Province, proposing that: by the end of 2025, the output value of the medical device industry in Jilin Province should have reached 20 billion yuan, with an average annual growth rate of 32%; The innovation capability should have been significantly improved, with breakthroughs in more than 10 key technologies and core components, formation of more than 50 core invention patents, the addition of more than 200 registration certificates for Class III medical devices, and the addition of more than 1,000 registration certificates for Class II medical devices; The industrial agglomeration effect should have been significant, with completion of 1 medical device agglomeration zone at million-level, one medical device demonstration park at 5 billion level, and multiple characteristic parks; The industrial chain should have become more complete, with preliminary formation of a development model for the entire medical device industrial chain, including raw materials, research and development, production, circulation, and use; The technical support capability should have been significantly improved, and the medical device review capability, inspection and testing capability, clinical trial capability, and third-party technical service capability should have been significantly improved.

In 2020, the Office of the Liaoyuan Municipal People’s Government issued the Implementation Measures for Flexible Transfer of Industrial Land in Liaoyuan City (For Trial Implementation), proposing that: We should supply industrial land through flexible lease term, first lease and then transfer, a combination of lease and transfer, and long-term lease through bidding, auction, and listing in accordance with the law; The flexible transfer term for industrial land should be generally 10, 20, 30, and 40 years. The enterprises should be allowed to voluntarily choose the land use right transfer term during this term. The Implementation Measures have improved the land supply system in Liaoyuan City while reducing the cost of industrial land.

(2) Resource advantages

In recent years, Liaoyuan City has continuously optimized and adjusted its energy structure, fully launched the construction of a clean energy heating demonstration city in North China, and carried out 47 clean heating renovation projects such as “coal to gas” and “coal to electricity”, etc., which are expected to reduce coal consumption equivalent to 510,000 tons of standard coal. In addition, Liaoyuan City has abundant resources such as wind energy, solar energy, biomass energy, etc., providing energy security for construction of the project.

Dongfeng County is rich in mineral and wind power resources, with huge reserves of iron, manganese, limestone, granite, and peat soil, etc., and abundant mineral water reserves. The perennial stream flow can reach 500,000 tons; The Yingcang Wind Power Project and Qingyu Wind Power Project have been put into operation. The largest substation hub in Northeast China, i.e., the “500,000 Substation”, is 10 kilometers away from the county, while the “220,000 Substation” is only 1 kilometer away from the county.

(3) Industrial advantages

Dongfeng County has cooperated with the Jilin Medical Products Administration to establish the “Medical Device Innovation Dongfeng Service Station of Jilin Medical Products Administration”, which has greatly improved the efficiency of settled enterprises in project approval, product testing, and other aspects. The park has also introduced Suzhou CCIC Huatongwei Inspection Institution to facilitate testing and inspection of medical device products by the enterprises.

Phase I of the project has been put into use. As of now, a total of 32 medical device manufacturers and related enterprises have signed contracts to settle in the park, including 9 production-oriented enterprises, 1 inspection and testing enterprise, 7 consulting service enterprises, and 15 registered person enterprises. By now, the enterprises in the park have completed the filing of 21 Class I medical device products, obtained 13 Class II medical device product registration certificates, and completed quality management system examination of 10 product registration certificates which are currently waiting for issuance of certificates; 4 medical device manufacturers in the park have obtained medical device production licenses and can start production upon receiving orders.

(4) Talent advantages

Liaoyuan City has abundant human resources, and there are vocational colleges in the urban area that can make directed training of talents according to the demands of the enterprises. Liaoyuan City has a good industrial development foundation and is only 115.13 kilometers away from the nationally renowned “University City” and “Motor City”, i.e., Changchun, which can meet the demands of the enterprises for various kinds of talents.

Meanwhile, Liaoyuan City encourages the enterprises to jointly build expert studios, research and development centers, and internship and employment bases for college students with universities and institutions that have signed cooperation agreements. It also organizes directed recruitment of professional talents in public institutions and universities, establishes “science and technology innovation teams, and scientific and technological expert workstations (rooms)”, and flexibly introduces talents from outside the country.

(5) Location and transportation advantages

Dongfeng County is adjacent to two provinces and six cities, with convenient transportation extending in all directions, as well as strong accessibility of tourism transportation and the accessibility to tourist attractions. Located 158 kilometers away from Changchun Longjia Airport and 268 kilometers away from Shenyang Taoxian Airport, it has integrated into the one-hour economic circle of Changchun and the two-hour economic circle of Shenyang. There are multiple highways crisscrossing the area, with the National Highway 303 running parallel to the Siping-Meihekou Railway, and the Changchun-Meihekou Expressway and Jilin-Shenyang Expressway intersecting in Dongfeng.

1.2 Contents and scale of project construction

1.2.1 Product scale

After the project is completed, it can accommodate 286 medical device companies to settle in.

1.2.2 Contents of project construction

The project covers an area of 262,000 square meters with a total construction area of 319,000 square meters. It mainly includes construction of standardized factory buildings, standardized logistics warehouses, research and development centers, staff dormitories, and ancillary buildings.

1.3 Total investment of the project and capital raising

1.3.1Total investment of the project

The total investment of the project is 1.18 billion yuan, including the construction investment of 1,062 million yuan and current funds of 118 million yuan.

1.3.2 Capital raising

Raised by the enterprise itself

1.4 Financial analysis and social evaluation

1.4.1 Main financial indexes

After the project reaches the production capacity, its annual sales income will be 680 million yuan, its profit will be 230 million yuan, its investment payback period will be 6.2 years (after the tax, including the construction period of 2 years), and its return on investment will be 19.5%.

Note: “10 thousand yuan” in the table is in RMB

1.4.2 Social evaluation

After the project is completed, it can provide standardized factory buildings for manufacturers engaged in medical devices and related industries, meet the needs of the enterprises for research and development, incubation, and production, and provide a good development environment for the settled enterprises; Meanwhile, it is conducive to promoting the upgrading of the local medical device industry, driving the development of upstream and downstream industries, and promoting local employment, thus playing a good role in promoting local economic and social development.

1.5 Cooperative way

Joint venture or cooperation, other ways can be discussed in person.

1.6 What to be invested by the foreign party

Funds, other ways can be discussed in person.

1.7 Construction site of the project

Dongfeng County, Liaoyuan City, Jilin Province.

1.8 Progress of the project

Attracting foreign investment.

2. Introduction to the Partner

2.1Basic information

Name: Dongfeng County Key Project Service Center

Address: No. 293 Dongfeng Road, Dongfeng Town, Liaoyuan City, Jilin Province

2.2 Overview

Dongfeng County is located in the central and southern part of Jilin Province, in the residual vein of Hadaring Branch of Changbai Mountain. It is a semi-mountainous area of “five mountains, one water, and four fields”, covering an area of 2,522 square kilometers. It governs 14 townships and 3 sub-districts, with a total population of 400,000. It is the famous “Hometown of Cervus Nippon in China” and “Hometown of Farmer Painting in China”, as well as a “National Commodity Grain Base County, National Top 100 Characteristic Industry County, National Greening Advanced County, National Basic Education Advanced County, National Legal Education Advanced County, National Best Investment Environment County, National Village Cleaning Action Advanced County, and Safe China Construction Demonstration County”. It has successfully established National-level Health County, National Martial Arts Town, Chinese Poetry Town, Reading Town in Jilin Province, Provincial-level Garden County, Provincial-Level Civilized County, Provincial-level Double Support Model County, and Provincial-level Leisure Agriculture Demonstration County.

Dongfeng insists on improving the primary industry, strengthening the secondary industry, and revitalizing the tertiary industry, and focusing on consolidating the foundation, enhancing vitality, and expanding the total output, having improved the comprehensive development strength of the county continuously. In 2023, the gross regional domestic product of the entire county reached 16.573 billion yuan, with a growth rate of 5.7%. The total output value of industrial enterprises above designated size reached 14.987 billion yuan, with a growth rate of 8.4%; The growth rate of value-added reached 12%. Fixed assets investment reached 4.643 billion yuan, with a growth rate of 3.2%. Local-level fiscal income reached 456 million yuan, with a growth rate of 5%. The per capita disposable income of urban and rural residents reached 32,158 yuan and 19,801 yuan, respectively, with a growth rate of 4.7% and 5.6%, respectively. It ranked tenth in the assessment of county-level economic revitalization and development throughout the province.

In order to create a favorable environment that is friendly, safe, supportive, and helpful to business, Dongfeng County has successively formulated and introduced overall preferential policies and special preferential policies for entering the park. The main leaders of the county party committee and government have taken the lead in undertaking and guaranteeing the construction of the park and carrying out investment promotion. The development zone has also formulated a mechanism for all employees to undertake and guarantee, and each enterprise in the park is undertaken and guaranteed by a dedicated person to help the enterprises solve difficulties and further extend and enrich the industrial chain.  

2.3 Contact method

Postal code: 136399

Contact person: Yin Shaoqing

Tel: +86-437-6317090 +86-13278450927

E-mail: swj6317090@163.com

Contact method of the city (prefecture) where the project is located:

Contact unit: Liaoyuan Municipal Bureau of Commerce

Contact person: Ai Jing

Tel: +86-18643787709

E-mail: lyjhjxmc@163.com