China’s Import and Export of Medical Devices in the First Quarter of 2012

Since 2012, the world economy began to demonstrate positive signs, as the United States and Japan’s economic performance were better than expected. Employment, consumption and industrial production have all picked up, as a result, the debt crisis in Europe has been controlled to some extend, and the emerging economies’ policy effort to promote economic growth kept on growing. However, the profound impact of international financial crises and sovereign debt crisis is still fermenting; the weak overall growth in the world economy is still unchanged, and the economic recovery is still a long and tortuous uphill struggle. all these have posed serious challenge to China’s foreign trade.

According to customs statistics, in the first quarter, the total export revenue of medical equipments in China amounts to $ 6.25 billion, accounting for 33.69% of the total import and export of medicine and health products, an increase of 14.54%. Among them, export revenue is $ 3.592 billion, a year-on-year increase of 11.26%; while the imports revenue amounts to $ 2.657 billion, a year-on-year increase of 19.29%. The trade surplus was $ 935 million , down by 6.6 percent . Overall, in the first quarter, although foreign trade of medical devices is 7% higher when compared with 7.3% of the country’s foreign trade growth rate,the situation is still not optimistic.

As Import and Export growth Shows Significant Slowdown, Trade Surplus Narrowed

In this first quarter this year, the growth of import and export medical appliances shows significant slowdown, which is only 14.54%. Compared with the growth rate of 43.76% in the same period last year, this year the growth rate goes down by nearly 30%. The main reason for sloppy demand is shrinking international market demand and rising costs in the domestic market. In the first quarter, the trade surplus was $ 935 million, compared with that of the third quarter of last year ($ 1.328 billion) and that of the fourth quarter ($ 1,282,000,000), the trade surplus have experienced great fall for 2 quarters in a row.

The Export Growth to Europe and the United States is lower than the Overall Increase, whereas that to the Middle East and Africa Experienced Rapid Growth

The United States, Japan and Germany are the traditional major markets for China’s exports of medical equipment, in the first quarter, cumulative exports to the three countries reached $ 1.493 billion, accounting for 41.57% of the total exports of medical devices, but the growth in the export still shows downturn, which is 9.99%, 4.92% and 4.9 % respectively. It is noteworthy that China’s exports to Africa and the Middle East are in rapid growth, up by 28.34% and 21.21% respectively; and the export to the Russian market enjoys a growth of 45.9%.

Export of Diagnostic Equipment Grew Steadily, While Dressings and Rehabilitation Supplies Show Negative Growth

In the first quarter, commodities that show strong growth momentum are disposable supplies, Dental Equipment and Materials and hospital diagnostic equipment. The highest share of medical equipment was occupied by the diagnostic equipment, which maintained a steady growth of 12.29%, among which ultra-sonography, artificial respirator, anesthesia equipment and artificial joints enjoy a relatively fast growth, with an increase of more than 20% respectively, while export of Health Care and Rehabilitation supplies and medical dressing’s showed a slight downward trend, decreased by 0.71% and 0.34% respectively.

Private Enterprise Provides Impetus to Export Growth

Baptized the international financial crisis, China’s private enterprises increased its speed in restructuring and upgrading. Besides, it also demonstrates their ability to expand the market and significantly enhances the awareness of innovation; as a result, its export growth rate was significantly faster than the other economic powers. In the first quarter, the export growth was up by 16.28%, becoming the driving force of exports of medical equipment. The export of foreign-funded enterprises increased by 10.32%, and there has been a 1.32% decline in exports of state-owned enterprises.

Import of Diagnostic Equipment Increased, Germany and Japan Become Our Major Source

Viewing from the structure of imported products, in the first quarter of China’s imports of five categories of medical products, diagnostic equipment imports amounted to $ 2.029 billion, accounting for 76.34% of the total imports of medical equipment. Compared with the share of the third quarter (75.27%) and fourth quarter (76.19%) last year, it showed a sustained growth.

The United States, Germany and Japan are major source of China’s imports of medical equipment, in the first quarter, the import revenue from these 3 countries totaled $ 1.457 billion, accounting for 71.8% of the import of diagnostic equipment. It is noteworthy that the faster growth in imports of medical equipment is from the United States and Germany, up by 31.56% and 21.29% respectively. Ever since the new health care reform, the central government has invested a total of over 600 billion yuan for county hospitals and primary health care service system for the standardization of construction and equipment purchase, which is the major motivation of import equipment.

Foreign Investment, Private and State-Owned Share of Imports are in a Tripartite Situation

Different from the structure of the export enterprises, the import market share shows a situation where foreign investment, private and state-owned share of imports are in a tripartite, and their investment in import are $ 1.079 billion , $ 868 million and $ 698 million , accounting for 40.62% , 32.67% and 26.28% respectively.

In the first quarter, the poor export growth is mainly due to the shipped off-season, but the growth rate decline trend shows that exports are still facing many problems and the overall situation is still not optimistic.

First, weak external demand; the world’s economic growth is lack of growth momentum, especially in Europe, the economy is on the verge of recession, demand in the international market shows a weakening trend.

Second. Increase in production costs; especially the labor costs continue to rise. In the past three years, the average wage of urban workers rose by 33%. Although the prices of raw materials fell back a bit, it is still running on a high stage, resulting in the weakening of China’s manufacture’s competitive advantage.

Third, the tight overall trading environment; for instance, according to the relevant departments in Argentina, rom February all the Argentine importers need to fill in the online declaration form before the import of all goods. The importers are required to get a government approval before they can be purchased dollars for the purpose of import, which will undoubtedly increase the uncertainty and difficulties of the export business transactions. However, viewing from the import perspective, with the deepening of domestic health care reform and continuation of the state import policy measures, will continue to drive the growth of imports of medical equipment. Therefore, taking all the above-mentioned factors into consideration, exports of medical equipment is facing multiple challenges. But imports are expected to grow steadily; the overall foreign trade will show a low yet steady growth, demonstrating a trend of balanced momentum.

 

2 responses to “China’s Import and Export of Medical Devices in the First Quarter of 2012”

  1. Gilbert Lam says:

    Dear Sir / Madam,

    For your published article “China’s Import and Export of Medical Devices in the First Quarter of 2012”, could you please kindly advise the reported statistics figures are in terms of RMB or USD ?

    Thanks for your kind help and advice.

    Best Wishes
    Gilbert Lam
    E-mail: gilbert.lam@dbschenker.com

Leave a Reply

Your email address will not be published. Required fields are marked *