D4.1a - Scientific paper on the state of the art of FDI and trade flows (M12)

In a context of urbanization and rapidly aging population there is a growing need in China to improve and modernize the existing healthcare system. The Chinese government has identified the quality improvement of healthcare services and the adoption of new technologies as key priorities in the future. The aim is to improve healthcare service quality, while adopting new technologies to overcome service disparities. Reforms in the healthcare sector are affecting pharmaceutical, medical equipment and diagnostics industries in China.Foreign investments in healthcare sector are being encouraged in China and they have boomed there over recent years. Spending is expected to continue to rise as it is still a comparatively low percentage of operating revenues when compared to developed markets.
In this paper, we focus on international trade and direct investments in healthcare industry between Europe and China, addressing healthcare subsectors like pharmaceutical & medical products and medical devices, in order to highlight challenges and opportunities for the two countries.
In addition, building an Input-Output model and applying it to the available database, we
implemented a linkage analysis or dispersion effects, in order to determine the importance of healthcare industry in relation to upstream and downstream connections with all the other productive industries.

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