Profit from China's medical reforms

Beijing is to spend $125bn over the next three years on thousands of new clinics and hospitals. That will be a major boost to China's medical device industry as money is spent on locally produced, low cost medical equipment. Eoin Gleeson examines the sector, and picks the best company to invest in now.

How Barack Obama must secretly envy Chinese premier Hu Jintao. While Obama has been locked in a battle over healthcare reform, his Chinese counterpart has simply ploughed ahead. In April, Hu announced that Beijing will spend $125bn over the next three years on thousands of new clinics and hospitals. And ministers applauded politely.

But this is a major u-turn. In the 1980s, China abandoned its socialist healthcare system and cut public services to much of the population. As private enterprise took over major city hospitals, health costs spiralled, so many Chinese resorted to home treatment. There are more than 300 million Chinese without any kind of healthcare cover, says Steven Mufson in The Washington Post. And a single hospital admission can cost almost a year's income for the average citizen.

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Eoin came to MoneyWeek in 2006 having graduated with a MLitt in economics from Trinity College, Dublin. He taught economic history for two years at Trinity, while researching a thesis on how herd behaviour destroys financial markets.