Healthcare Plays on China's Rising Standard of Living

Robert Hsu, October 15, 2009

Last week marked the 60th anniversary of the founding of the People's Republic of China. Since 1949, the country has come a long way, and the Chinese had much to celebrate during the weeklong festivities.

One area that has greatly improved for the Chinese is the country's standard of living. While much of this can be attributed to better education, more job opportunities and higher wages, one of the biggest factors contributing to China's standard of living improvements is healthcare.

In fact, here are some interesting facts about China's growth in the healthcare industry…

When the PRC was founded, the average Chinese lifespan was just 35 years. Today, it stands at 73 years.
The infant mortality rate has dropped from 20% to 1.5%.
Today, China claims 278,000 health institutions and 613,000 rural clinics, more than four million hospital beds and six million health professionals. Sixty years ago, China had less than 4,000 medical institutions, about 85,000 hospital beds and 500,000 health care workers.
About 833 million of China's rural population are covered by a 2003 cooperative medical care plan subsidizing those who can't afford proper healthcare.

As you can see, China has taken great strides over the years in regards to its health care industry. But I'll be the first one to say that China still has a long way to go.

Currently, healthcare costs are still too high for most Chinese, and there is not enough of a social safety net to cover basic care, like here in the U.S. As a result, this has led to the incredible savings rate in China, because most Chinese set aside a significant portion of their paychecks to pay for any medical emergencies or doctor's bills.

But what's great is that the Chinese government also understands these issues and is addressing them. In April, the government announced a $125 billion healthcare plan that will be spent over the next three years to improve the health care system. This money will lead to significant growth in the Chinese healthcare industry.

And there's no denying that healthcare reform has been one of the hottest topics around the world this year. Policymakers worldwide are striving to provide affordable and high-quality medical services to its citizens. And this coupled with the fact that healthcare is a defensive industry has created profitable opportunities in the medical sector.

In fact, because of the profitable opportunities that I'm seeing in this industry -- especially in China with its healthcare reform plan -- I've loaded the China Strategy portfolio with several unique ways to profit from medical services. Take a look…

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