Don’t write off Hainan as a competitor

Many medical travel destinations have been increasingly reliant on Chinese medical tourists, but now they face a dual threat. Early hopes of a swift rebound in outbound China travel are dwindling, while South China’s Hainan Province has stepped up efforts to boost its medical sector, focusing first on encouraging domestic medical tourism.

Data from the latest travel report by ITB China show that it’s likely that the Chinese outbound travel market will take up to a year to recover.

The 2020 China Market Recovery Special Edition found that 43% of the 200 travel agents surveyed believe outbound travel will recover within the next 9 to 12 months at best, compared with 33% who say it will take 6 to 9 months. 20% believe it will take 3 to 6 months and only 4% say within the next 3 months.

China was hit first by COVID-19, and should be one of the first countries to recover. Hainan’s Boao Lecheng International Medical Tourism Pilot Zone is seeking to capture this recovering travel market, by transforming tropical Hainan into a destination for cutting-edge medical treatment.

Some medical travel experts have questioned Hainan’s potential as a medical tourism destination.

However, the amount of Chinese state effort and money supporting this Pilot Zone make the government efforts of Dubai and Malaysia seem small by comparison. Many Chinese are also fiercely loyal about their country and, influenced by anti-China rhetoric voiced by some destinations, may well now choose domestic medical travel to Hainan instead.

Free-trade zone with preferential policies

As part of its ambitious plan to turn the island into a free-trade port, Beijing has established a special healthcare zone that, under preferential policies, allow it to import medical devices, technology and drugs that are hard to access in the mainland.

The demand for overseas medical treatment among Chinese partly reflects the difficulty that new international drugs have in entering the Chinese market and partly that overseas medical businesses have many processes to pass before opening hospitals in China.

Hainan will offer a number of exclusive treatments in China, including VenaSeal, a therapy from Medtronic designed to treat patients with varicose veins; and Optimizer Smart, a heart therapy treatment from US firm Impulse Dynamics. There will also be cutting-edge treatment for cancer.

The health care zone now has 200 imported medical solutions and the approval period for new products can be as short as one day.

A threat to USA, Japan, Thailand, South Korea?

Chinese go to the USA and Japan for major operations, Thailand and Malaysia for infertility treatment, plus Ukraine and South Korea for cosmetic surgery. The Boao Lecheng International Medical Tourism Pilot Zone wants to take Chinese business from all these counties.

By the end of 2020, the zone expects 200,000 patients and tourists, up from 75,000 people in 2019, helping to drive revenues of 640 million yuan (US$90.5 million) from medical treatment. Exactly how many of these are medical tourists is unclear.

The medical park is also known as Boao Hope City and currently has a dozen hospitals. It is one of 11 key zones underpinning President Xi Jinping’s vision to create an internationally influential free-trade hub by the middle of the century, to rival Hong Kong and Singapore.

Some Chinese and overseas investors have their doubts on the potential of Hainan. China’s Hainan free-trade port plan raises questions over global trading rules compliance. The hospitals have problems in attracting doctors and healthcare prices are high.

Cooperation with Taiwan

Taiwan with Hainan are setting up as direct competitors with other regions, particularly Hong Kong, on finance, international trading, tourism and medical tourism.

Hainan is one of the areas in which Taiwan-funded businesses have gathered and grown on the Chinese mainland. There are currently more than 1,900 Taiwan-funded enterprises, or projects registered in Hainan.

Hainan has stated it will promote exchanges and cooperation with Taiwan in developing the Hainan free trade port, and it will use the medical park to enhance communications between the two regions on medical care.

Hainan has also said it will make full use of the preferential policy advantages of the Boao Lecheng International Medical Tourism Pilot Zone to encourage research and broaden the application of new medical technology, equipment and medicine from Taiwan.