The globalization of China’s health industry. Industrial policies, international networks and company choices

At the time of writing of this book the world has been devoting an unprecedented amount of attention to the Chinese healthcare system. Since the very beginning of 2020, the rapid spread of the Covid-19 virus in China has immediately attracted the attention of international media and public opinion. Observing the events in China, the World Health Organization has decided to declare it a global emergency. And then, week after week, it has gradually become clear to everybody that what began in China would have spread all around the world. A very local Chinese health emergency has rapidly become a global emergency, challenging our international economic and political equilibria. The new virus has gained immediate concern for its novelty, for its high rate of infectiousness and for the lack of appropriate preventive care (such as vaccines). In the attempt of China and other countries to curb contagion, policy measures have had impacts on people’s movements within and across countries and on their daily activities, including work. This is in turn has had huge impacts on economies and will likely have more in the future. To this matter the International Monetary Fund immediately cut its growth prospects and many other relevant institutions—World Bank, the World Economic Forum, the Organization for Economic Cooperation and Development, Deutsche Bank, Morgan Stanley, Moody’s, just to mention a few influential ones—have shared very similar views. Several manufacturing companies have stopped production and financial markets have everywhere been signalling economic difficulties and very negative expectations. Some specific filières—like tourism, entertainment, airlines, luxury goods makers and retail—have been the first and hardest hit at the beginning of the crisis. Coronavirus has started to disrupt the global supply chains with some industries—tech companies, apparel makers and industrial equipment manufacturers—showing to be the most vulnerable. On the one side, one local infection originated in the city of Wuhan became a dramatic health emergency for China and for the rest of our interconnected planet. On the other side, the social, political and economic impacts of this health crisis moved very quickly from Wuhan, to China and finally to our entire globalized world. The vulnerability of the local Chinese healthcare system has, rapidly and dramatically, become a threat for China and for our global socio-economic order. The global coronavirus crisis has reinforced one of the main ideas we present in this book: that the “production of health” is everywhere a vital strategic “industry” for our contemporary complex, fragile and interconnected societies. In general, as we shall see in Chap. 1, countries need an effective and efficient health industry for several reasons. To begin with, an effective and efficient health industry is needed because of the complex relationship that exists between growth and health. But this is only one of the reasons that make the health industry strategic, and it is not even the most important one. In fact, as we argue with more detail in the chapter, an efficient and effective health industry plays a central role in the sustainability of (economic and social) structural change, paving the way for progress in human development. Moreover, such sustainability is also reflected in the political consensus that is normally built around the capability of achieving “desired” levels of health by the population. The ability to guarantee such levels of health and to guarantee safety for a population of citizens is a crucial tool to build trust and consensus. And again, the recent epidemic cases confirm that the need to focus more on the study of how public health crises shape public trust, challenging the economy and societal governance. Finally, the provision of “health” opens up immense technological and prosperity opportunities, connected, for instance, to digitalization and Big Data collection and analytics, that can trigger major structural changes of the economy as well as in people’s everyday lives. In this scenario, the centrality of the health industry appears particularly evident in the Chinese case because of, at least, two main sets of motivations: (a) the relevance of the healthcare challenge in contemporary political and institutional equilibria in China; (b) China’s unique weight in globalized world, both from an economic and geopolitical perspective. For the two above-mentioned aspects—the centrality of the health industry and the very special implications of the Chinese case—in our book we focus on how this industry in China is growing, innovating and becoming global (Chap. 2). We devote special attention to the main areas in which this path of change takes place: government policies (Chap. 3), international flows of investments (Chap. 4) and research and innovation (Chap. 5). This book focuses on the experience of the Chinese health industry, which is seen as a very sophisticated knowledge-intensive filière, animated by a plurality of interconnected networks of public and private actors: service providers, large manufacturers, small and medium-sized enterprises (SMEs), hospitals, clinics, laboratories, research centres, universities, financiers, investors. The producers of health goods, services and knowledge are populated by communities of doctors, paramedics, analysts, managers, entrepreneurs, white- and blue-collar workers, employees, technicians, bureaucrats, government officials and directors, researchers and academics. A very complex community of people and institutions, with their goals, incentives, knowledge and practices needing guidance and coordination. In other (final) words, the future of China’s health industry is about pushing even more the massive public, private and collective investment in people and infrastructure, in organization and technology, in advanced knowledge, education and research. Such a great national plan demands a capacity of coordination of a plurality of actors and long-term strategies. Also in China the production of health continues to need appropriate strategic industrial policies, as currently occurs in many other sectors and in many other countries. We refer to policies not only aimed at the promotion of the sector’s efficiency or innovation capacity, but visionary interventions driven by wide and ambitious societal goals. The success of China in this strategic industry will be a success for the entire world.