Government spending on health care to increase 7x by 2016

With the country on a relatively sound fiscal footing, the PRC government is turning to major domestic issues like health care. According to the WSJ, government spending on health care will reach US$170 billion in 8 years.



This should be especially beneficial for domestic medical device companies like Mindray.

Liu Yanming, an analyst with Galaxy Securities, expects government funding for health care to soar to about 1.2 trillion yuan (roughly $170 billion) in 2016 from about 170 billion yuan in 2006.



Du Jinsong, an analyst based in Hong Kong for Credit Suisse, says some medical-device companies will benefit from this increased spending. Mr. Du estimates that revenue in China's medical-device market will grow an average of 20% a year between 2007 and 2010.