The local government in central China’s Wuhan city has teamed up with Chinese insurance and financial service firm Taikang Insurance Group to launch a healthcare-focused industry fund to raise RMB20 billion (US$2.97 billion) in total, the two parties announced at the World Health Expo in Wuhan on Monday.
The new fund, which plans to collect RMB10 billion (US$1.48 billion) in the first round of fundraising, will be "guided by the government while operated in accordance with the market demand" to invest in healthcare-related companies who are based in Wuhan, or inclined to set up branches in the city. The fund will primarily seek investment opportunities in fields like genetically engineered drug research and development, stem-cell therapy, gene detection, and smart healthcare.
The fund already attracted investments from companies including Tencent-backed online healthcare services provider WeDoctor Group, retail pharmacy firm Jointown Pharmaceutical, YuanMing Capital, a healthcare specialty fund specialized in China-US cross border investments, and Agricultural Bank of China, one of Chinese "big four" banks.
During a rapid development phase after the country introduced the opening-up policy, China has almost completed the construction of national industrialization and urbanization. Amid an on-going social transformation, the healthcare industry will become a new source of economic growth, said National Health and Family Planning Commission spokesman Mao Qunan at the expo.
Mao said the Chinese healthcare industry has a great development potential since the consumption in the sector takes up only 6.2% of the country’s gross domestic product (GDP), compared to that of the United States which accounts for 17.9%.
The new fund comes on the heels of a healthcare industry development scheme launched by the Wuhan government on April 1. The government plans to boost the healthcare industry in Wuhan to reach gross revenues of RMB800 billion (US$119.14 billion) in 2025, with five to eight enterprises to be valued at over RMB10 billion (US$1.48 billion). The number is expected to hit RMB1.32 trillion (US$196.58 billion) in 2030, and further increase to RMB1.80 trillion (US$268.06 billion) in 2035.