Why You Will Not Make Money Investing In China’s Healthcare Sector

Sihuan Pharmaceutical Holdings Group Ltd

On paper, China’s healthcare sector should be entering a major bull trend for the next few decades, a trend every investor would want to ride. But as an investor, if you thought healthcare is a mess in the west, you haven’t seen nothing yet.

Massive aging population, increased chronicle diseases (sadly) due to industrial pollution and change in diets (hello junk food!) have pushed China to the number one spot, the world’s worst health record.

Of every 100 deaths in China, 85 are from chronic diseases. Compare that to the worldwide average of 63. It’s 70 in the U.S. and you can clearly see the side effects of “command industrialization.”

So, with increased demand for care, medication, surgeries etc… massive population, and still, lack of healthcare facilities, how can China’s healthcare trend be a bad investment? The answer: Government

The Chinese government literally owns the healthcare sector, not the shareholders. Since 2000, the Chinese government has cut medication prices 20 times — most recently a week ago — with a 17% cut for cancer and related medications. As a healthcare company, you are at the mercy of NDRC political panel, they, and only they, will decide what you can charge for your new revolutionary medicine, new x-ray machine, new healthcare facility etc..

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