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We forecast China’s healthcare market to grow significantly over the next decade (up from USD 1.4 trn in 2024), driven by a rapidly aging population. By 2040, adults aged 65 and older are expected to make up 27% of the population, leading to increased healthcare spending. This growth is anticipated to be fueled by innovative drugs, advanced medical devices, and high-value healthcare services. Despite challenges such as regulatory uncertainty and geopolitical risks, we think the structural opportunity remains compelling.

China's basic medical insurance (BMI) covers over 95% of the population and is projected to grow steadily. Reforms have led to price reductions in generics, allowing more funds for innovative treatments. By 2030, innovative drugs are expected to account for nearly 60% of BMI drug expenditures. Commercial medical insurance (CMI) remains underpenetrated, presenting a growth opportunity beyond the core BMI system.

Out-of-pocket healthcare expenditures in China are expected to rise as the population ages. Currently lower than in other aging countries, these expenditures are forecasted to grow at a 7% Compound Annual Growth Rate (CAGR) between 2024-2030, reaching USD 568 bn by 2030. This growth is expected to benefit the out-of-hospital market, particularly consumer healthcare, including tonic products, medical services, and home-use medical devices.

Amid aging and global uncertainty, we think the time is ripe for strategic focus on China's healthcare market. The aging trend and healthcare expenditure growth present significant opportunities that should not be overlooked.