The Globalization of China's Health Industry: Industrial Policies, International Networks and Company Choices

ISBN-13: 9783030466701 / Angielski / Twarda / 2020 / 188 str.

Marco R. Di Tommaso; Francesca Spigarelli; Elisa Barbieri

Spis treści

 

Chapter 1

China’s role in World health industry

The Chapter provides a critical overview of the main ideas underlying the book and sets the ground for the whole publication. It conceptualizes the starting point of our analysis, as well as goals and key contribution to the existing literature, current policy debate and firm level implication. It summarizes existing publications and available contributions on both theoretical and academic papers and reports.

 

The starting angle is China and how, in an historical perspective, it is changing its role in global manufacturing.
In particular, from being the factory of the world, China is gradually becoming a leader in technological advanced productions. The health industry is a crucial sector in this perspective for at least 2 reasons:

- It can support internal sustainability and a new normal growth. It is a crucial part of the bigger reform of the healthcare system, which is supposed to guarantee access to basic products and services to the population (demand side perspective);

- It leverages on high value added productions, advancing the role of China as global innovator (supply side perspective).

China is becoming increasingly important at the world level as regards the production of specific health related products, as data show. China is shifting attention from demand side of the healthcare sector, to the supply side.

An important restructuring process is taking place in the Chinese industry, which involves higher domestic concentration and international ventures of Chinese firms. The government is playing a crucial role in shaping this process, through the release of a series of integrated industrial policies, including the support to the “Go Global” strategy of the sector. Expectations are that this process will significantly affect global manufacturing patterns and international innovation networks.

In the light of changes in the Chinese market, we analyse some global implication:

·         If China enters the supply side, will it just satisfy the Chinese demand or try to conquer world market shares and Western country consumers?

·         How is the Western world going to face the competition of Chinese firms and their willingness to invest massively abroad? Will Europe be able to develop a common and single industrial policy to address the global changes in the healthcare market?

 

Chapter 2

Health industry growth and changing trends

After the first chapter analyses world trend and the role of China in a global and broad perspective, the second chapter goes deeply into the description of key determinants of industry growth and trade globalization patters at World level for the healthcare sector. Changing trends are analysed, including the emerging and growing role of China both in terms of demand for healthcare goods and services, as well as in terms of supply for technology, innovation, and products.

The analysis includes the role of Chinese non-state businesses, the role of Chinese SMEs vs large scale companies and R&D trends in Chinese firms in the different segment of the industry. Indeed, a focus on research and innovation capacity of China is included, to determine the perspective role at World level of this country, in the specific industry. We take into account the cooperation between public and private sector and policies than influence the behaviour of private Chinese firms.

Methodology is based on industry statistics and market data, also at macro and industry level, to drive the reader into a deeper knowledge of the healthcare sector and its fundamental dynamics. Also, we include relevant literature findings and data, on micro level, on the distinction between State Owned firms and private firms which are gaining a growing role in different sub-segment of the industry.

The intent of the chapter is to understand current trends at industry and micro level to analyse the determinants of future development of Chinese businesses in the health industry.

The chapter is a bridge towards the rest of the book where the focus is totally on China.

 

Chapter 3

The Government long-term strategy for HC sectors: restructuring the industry 

The chapter is the first of 3 chapters were explanation of the current trend in the supply side of Chinese healthcare market is analysed. While in this chapter we focus on macro level of analysis, the following two are based on meso and micro level. 

We introduce the importance of analysing the role of the Government to understand how and why the industry is changing. The government sets priorities and plays the role of entrepreneur in driving firms’ strategies and key decisions.

The chapter deeply explains the role of the Chinese government in reforming the Chinese health system and health industry. These reforms involve both the demand and the supply side of the health-related economy. In particular it highlights the long-term trends in the government support to the health-related industries. In the recent National Five Year Plans the government has indicated some health-related sectors (particularly the pharmaceuticals and biotech) among the strategic emerging industries. It has also issued specific industrial development plans for these sector, which include financial support to these industries as well as specific guidelines and rules for their development. Included in these plans are for instance indications on the degree of tolerance, or specific promotion, of higher degrees of concentration in some industries. In some cases a higher market concentration is encouraged through Mergers and Acquisitions. The chapter uses the pharmaceutical sector as a case study to explain how the Chinese government is promoting a restructuring of the industry through Mergers and Acquisitions: a strategy that is meant to create Chinese “national champions” able to compete on the global market.

 

Chapter 4

Globalization and firms’ strategies

In the fourth Chapter, we move to a meso and micro level of analysis, embracing both specific firm-level policies developed by the Chinese government and behaviour of international and domestic firms in the Chinese market.

The Chapter is focused on the role of foreign and Chinese firms in shaping the changes of the Chinese health industry. Starting from the impact of the Open door, we describe how western and domestic firms are competing in the Chinese market, in the different sub-segment. A specific attention is devoted to foreign direct investment in China. 

At the same time, we focus on the Go Global strategy and analyze recent trends of Chinese expansion abroad via greenfield and non greenfield. As in Chapter 2, we focus also on the different contribution of different type of firms to the globalization processes (private vs state owened, big vs small and medium, etc…).

Some interesting cases are analyzed to understand motivation of growing integration of the Chinese healthcare industry in global value chain.

Challenges for the Chinese firms in the global market, as well as opportunities that healthcare industry in China can bring to foreign investors are addressed.

A key argument of the Chapter, in this regard, is to understand if Chinese investments are affecting global value chains and changing the role played by Chinese firms. In other industries, the exposure to international investments allowed China to conquer a strong competitive position at world level. The telecommunication sector is an example.

A key argument of the chapter is that the healthcare industry might soon experience what happened in other industries. We can learn from previous cases to figure what might happen in the healthcare sector. In fact, China is entering a new stage of its economic and political development, and the Government is trying to promote innovation leadership and sustainable growth. The domestic market is considered a source of growth to improve products, services, logistics so that from the strengths of domestic market, Chinese firms can attack global players.

 

Chapter 5

Innovation and Research excellence: the role of transnational research networks

Besides policies developed to support globalization of Chinese firms, the Chinese government is also investing to attract talent in healthcare provision and innovation. In the light of this approach to secure sources of innovation, this chapter analyses the position of China within the transnational research networks. After having been neglected for years, science is now considered a pivotal factor to accelerate the technological upgrading of the country while guaranteeing social sustainability to the process.

China’s scientific community is increasingly active in the international scenario, even if the country is still showing some elements of weakness in the capacity to be part in transnational research networks and to increase the results reached in terms of quality of research.

The chapter illustrates the evolution of the presence of the country within the international scientific scenario, with particular reference to the capacity of Chinese scientists to enter transnational networks of collaboration. Furthermore, it also describes the specific case of transnational relations in health, which have specific traits of peculiarity. They are in fact particularly complex in relation to the nature of the different institutions involved, to the complementarity of knowledge required, to the amount of investment needed. At the same time, being part in international research circuits may have potential spill over effects on the manufacturing system and the technological upgrading of the economy, but also on the well-being of population and the sustainability of growth. 

 

Chapter 6

Challenge for the future

The Chapters offers a wrap up session on key ideas and issues described in the previous chapters. The kind of future we can envisage based on Chinese growing role in world healthcare industry is depicted We highlight the contribution for literature, policy implications and impact for Chinese and Western industries, firms and research circles.

The discussion developed in this final chapter is built around the key findings of different previous chapters, in the intent to analyse the determinants of future development of Chinese businesses in the healthcare industry and relevant implication at global level.

Beside the role of China, we analyse puzzling situation for the Western markets and possible pro-active initiatives that Europe and other Western countries might try to build to face the potential leading role of Chinese firms in the global value chain for the healthcare sector.

 

O autorze

Marco R. Di Tommaso is Full Professor of Applied Economic Studies, University of Ferrara, Italy, and Director of c.MET05 - The National University Centre for Applied Economic Studies, Italy. He is also a Life Member Fellow at Clare Hall, University of Cambridge, UK, and Honorary Professor at the South China University of Technology and the South China Normal University.

Francesca Spigarelli is Associate Professor of Applied Economic Studies at the University of Macerata, Italy, where she is Director of the China Center, and Vice Rector for Entrepreneurship and Technological Transfer and for European Research Policy. She is also a member of the c.MET05 Steering Board. 

Elisa Barbieri is Associate Professor of Applied Economic Studies at the Ca’ Foscari University of Venice, Italy; Senior Researcher and a member of the Steering Board at c.MET05. She is Associate Editor for the journals Competition and Change and l’Industria.

Lauretta Rubini is Associate Professor of Applied Economic Studies and Coordinator of the Master's Degree Programmes at the Department of Economics and Management of the University of Ferrara, Italy. She is also Visiting Scholar at the University of California Los Angeles, USA, and Senior Researcher and a member of the Steering Board at c.MET05.

Blurb

This book explores the ongoing transition of China’s economy by examining how its healthcare industry is growing and changing. The coronavirus pandemic has reinforced one of the authors' key points: in our complex, fragile, and interconnected societies, the production of health is a vital strategic ‘industry’. The case of China is particularly salient, because of its economic and geopolitical significance, and the scale of the healthcare challenge it has faced.

Adopting a multi-level perspective, the authors examine the entrepreneurial role of the Chinese government as it seeks to strengthen the competitiveness of domestic firms. They analyze the strategies employed to improve China’s technology and capacity for innovation, and discuss China’s strategies and policies to ensure knowledge acquisition and creation in the long-term, with particular reference to international scientific collaborations. This book is a must-read for students, researchers, and policymakers interested in the prospects and challenges posed by the growth of the Chinese healthcare industry and its global impact.