2009, a crisis-ridden year for some developed countries, despite the economic downturn , but ¡°a thin camel is never smaller than a horse¡± and the overall economic indicators are slowly recovering. However, a laissez-faire trade protectionism derived from developed countries against developing countries has brought a great challenge for the world trade; especially put many obstacles in China's foreign trade environment. Nevertheless, China's economy has still been the locomotive of the world economy and obtained some remarkable achievements in the past year. Among them, China's medical foreign trade has also made its due contribution.

1, China's medical equipment foreign trade grew more than its expected value

According to customs statistics, China's total import and export of medical equipment products in 2009 was 18.349 billion U.S. dollars, increased 12.69% over the same period . It accounted for 33.66% of total import and export of medicines and healthcare product at the same period, of which, total import was 6.105 billion U.S. dollars, increased 17.03% over the same period; and exports amounted to 12.245 billion U.S. dollars, an increase of 10.64% compared with same period. Trade surplus increased by 50.13% and reached to 6.14 billion U.S. dollars, it was 4.09 billion U.S. dollars in 2008. (See table 1, 2 for details)

Table 1 China's medical equipment export in 2009

Name of product	Amount change on a year-on-year basis (%) (%)	Export amount(ten thousand dollars)	Amount of money on a year-on-year basis (%)	Price change on a year-on-year basis (%)	Percentage (%)
Medical equipment (Export)	4.7	122.45	10.64	5.68	100
Health rehabilitation products	15.77	21.69	-4.96	-17.91	17.72
Dental equipment and materials	-6.09	2.48	23.62	31.64	2.02
Medical consumable	1.33	19.20	3.57	2.21	15.68
Medical dressing	69.83	41.36	32.85	-21.77	33.78
Diagnostic equipment	5.9	37.71	4.28	-1.53	30.8

Note: Data source: China Customs  

Table 2 China's medical equipment import in 2009

Note: Data source: China Customs

In 2009, China's medical device product export still maintained a double-digit growth rate which was nearly 7 percentage points higher than the corresponding growth rate of China's medical product export. Of which export sales accounted for 37.21% of China's total medical product exports; rate of increase of medical equipment imports was nearly 5 percentage points lower than that of medical product exports, and amount of imports accounted for 30.17% of China's total medical product imports

2, Developed countries are still China's main markets

In 2009, China has exported medical device products to 214 countries or regions, and imported other medical device products from 99 countries or regions. Among target export markets, ¡°top 5 markets¡± namely the United States, Japan, Germany, Hong Kong and the UK shared 55.44 percent of total exports, which increased by 1.89% compared with the same period in 2008; among import target markets, ¡°top 5 markets¡± namely the United States, Germany, Japan, Switzerland and the Netherlands accounted for 71.47 percent of total imports, which increased by 0.67 percentage points compared with same period last year (See table 3, 4 for detail).

Table 3 China's major import markets of medical devices

Note: Data source: China Customs  

Table 4 China's major export markets of medical devices

Note: Data source: China Customs  

From the perspective of imported product, in 2009, China's imported products mainly included ¡°X-ray application equipments¡±, ¡°color ultrasound diagnostic apparatus¡±, ¡° wearable or implantable devices to compensate for physical shortcomings or disabilities¡±, "catheter, intubation tube¡±, ¡°X-ray tomography instrument¡± and ¡° magnetic resonance imaging device " etc.  All of theses imports had varying degrees of growth respectively and CT product had the largest increase, a growth of 36.76%; and other imported imaging products increased to varying degrees. After 30 years of practice of China's reform and opening policy, it is time for some 3 A-level hospitals to update their medical equipments, which promoted our country's needs for large imaging equipments. Moreover, as economic development, attitudes of part of population toward consumption have changed. There was a growing demand for some high-end consumables and artificial ¡°make up¡± products by which quality of life can be improved. As shown in table below, amount of top 20 products accounted for 77.22 percent of the total amount of imports, which indicated fully that China's future high-end medical equipment market will grow exponentially (Table 5).

Table 5 China's major medical equipment imports in 2009

Note: Data source: China Customs  

China's medical equipment exports in 2009 mainly included medical dressings, massage apparatus, catheters and other polymer products, medical equipments, medical furniture and other products, of which medical dressings obtained a relatively high increase. It reflected that, nowadays, China's export products mainly involved medical dressings, low-value consumables and low-end equipments. Some high-end products were mainly exported to some multinational corporations in China. The export share of top 20 products accounted for 79.12 percent of total exports (Table 6).

Table 6 China's major medical equipment exports in 2009

Note: Data source: China Customs  

3. Pearl River Delta, Yangtze River Delta and Bohai Bay industry cluster lead the development of the industry  

According to official figures released by the State Food and Drug Administration (SFDA), China has more than 13,000 existing medical equipment manufacturing enterprises and 29,000 medical device companies engaged in foreign trade business. These enterprises are mainly distributed in the Pearl River Delta, Yangtze River Delta and Bohai Bay areas, and business enterprises exist all over the country. Manufacturing and business enterprises are especially concentrated in some coastal developed areas (Table 7).

Table 7 Medical equipment   exports of China's major provinces and cities in 2009

4, Foreign-funded enterprises account for half of the export  

More than 4,000 existing foreign-invested enterprises has promoted China's export growth of medical equipment, its total exports has been continuously accounting for half of China's total exports of medical equipment for many years. According to statistics, from 2005 to 2009, annual exports sales of foreign-funded enterprises accounted for 55.29%, 56.25%, 56%, 53.92% and 51.62% of total exports respectively, which reflected a significant role played by foreign-funded enterprises in China, as well as a greater degree of dependence  on these enterprises. Private business in recent years is quite outstanding, from 2005 to 2009, its annual export sales rose rapidly and accounted for 22.4%, 25.95%, 28.94%, 31.89% and 35.66% of total exports respectively , increased year after year. Nowadays, private business has gradually become the main force of China's exports of medical equipment; the competitiveness of state-owned enterprises on export clearly declined and their exports, from 2005 to 2009, accounted for 22.29%, 17.67%, 14.9%, 14% and 12.57% of total exports respectively, which basically had no growth and showed a downward trend in the past five years.

5, Trade pattern has been   further optimized

China's market opening and foreign technology transfer has played a catalytic role in the development of processing trade of medical equipments in China, and guided the way for the renewal of China's medical device products as well as explored a broader market for China's processing trade products. In addition, China's processing trade involves a large number of medical device products almost cover all the medical equipment exports and mainly export to U.S., Japan, Europe and other developed countries. Since 2005, with the improvement of China's manufacturing level and the deepened quality of domestic products, China's medical devices exports of general trade increased year by year, the proportion of processing trade of medical equipment decreased year by year, from 2005 to 2009, it was 43.2%, 42.3%, 39.2%, 36.9% and 35.13% respectively, indicating that the structure of medical device foreign trade has been further optimized.

Major regions locate at some areas in China where processing trade is more developed such as Guangdong Province, Jiangsu Province, Shanghai, Beijing and Zhejiang Province. Product mode mainly adopt OEM and ODM from multinational companies, and main export markets include the United States, Japan and Germany, accounting for more than 50% of China's global exports of processing trade products of medical device.

6, China's medical devices export in 2010 will increase as improved world economic situation.

According to IMF forecasts, in 2010, the world economy will be steady and growing; China's economy will continue to lead Asia-Pacific and world economy. While China's economy is expected to encounter inflationary pressures and external appeal for yuan appreciation, but China's economy as a whole still maintain a certain growth rate. Moreover, relatively large differentiation of medical device product, combined with continuously improved quality and performance of China's medical device products offers the possibility   for our products to become alternative products for developed countries and thus achieve a growth by leaps and bounds. In addition, China has a unique demand pattern for medical devices, namely some large-scale equipments and highly sophisticated products or high-value consumables are mainly imported from some developed countries; while some domestic mid or low-end diagnostic equipments and low-value consumables products are mainly exported to some developing countries. This multi-level product structure met different demands is not only consistent with supply balance in the international market, but also proves that China has truly become a world factory. But with the transition from "Made in China" to "Created in China", a fierce competition will emerge between some multinational companies and local Chinese companies in technological research £¦ development, application of new materials as well as green products etc. At the same time, our Government's new rural cooperative and medical reform will inject greater vitality into China's medical device market.