In an exclusive interview with China Daily, the president and CEO of the Philips Electronics' medical business group has said China is to become one of the company's most important development and manufacturing bases.

According to CEO Jouko Karvinen, the company's joint venture in Shenyang, Northeast China's Liaoning Province, will shortly deliver its first batch of locally developed products.

"It is a challenge here in China, as we need to move really fast," he said.

"China is the third largest medical market in the world, but has the potential to become the biggest in six to seven years."

The market will grow as the country improves its national medical system and people become more concerned with their health and more willing to spend money on healthcare, he added.

It is estimated that the number of Chinese hospitals with over 1,000 beds is three times of that of the United States, but per-bed spending is only 1 per cent of the US figure.

According to the China Pharmaceutical News newspaper, Chinese medical equipment market sales rose by 17.4 per cent year-on-year in the first quarter to 5.58 billion yuan (US$674 million).

Philips, which launched a joint venture with Chinese firm Neusoft last year, later than its two major competitors General Electric and Siemens, has been trying to move quickly in the Chinese market.

It released its first two locally-developed-and-manufactured computerized tomography (CT) scanners to the Chinese market on May 21 in Nanjing, East China's Jiangsu Province.

Karvinen said there is a huge demand for the products, targetted at the medium and low-segments of the market, in China.

It is estimated that 75 per cent of CT products sold in China fall into the mid-low category. Philips will begin delivery of products in September.

The Dutch giant hopes to have one third of market share by 2007. Before the establishment of its joint venture last year its share was less than 10 per cent.

Philips Neusoft Medical Systems Co Ltd will become Philips' only production base for medium and low-end CT products in the world and will accept orders from overseas markets this month. The target markets include India, Japan, Eastern Europe and Latin America.

Karvinen said the two machines are just the beginning of Philips' efforts in local development and manufacturing, with more products being developed in the second half of this year.

The company hired more than 100 sales people in the first five months to push on its drive into the Chinese market.

Source: China Daily