SHANGHAI - China's Wanda Group will invest 15 billion yuan (S$3.29 billion) in hospital developments around the country, the property and investment firm said in a statement on Wednesday, tapping into a reform drive to give private firms a larger role in healthcare.
The deal will see Wanda invest in and build three hospitals in the major cities of Shanghai, Chengdu and Qingdao, which will be managed by British-based healthcare operator International Hospital Group (IHG), Wanda said.
The investment plays into China's wider healthcare reform drive, with Beijing hoping to attract more private money into the sector to reduce the burden on creaking public hospitals and trim a healthcare bill set to hit US$1.3 trillion by 2020.
Wanda's billionaire chairman Wang Jianlin said the developments would help satisfy "the growing healthcare needs of the country's affluent population," as well as help the sector more widely by bringing overseas experience into the market. "(It) also helps the cities in which these projects are located to elevate their healthcare standards to international levels, and to serve as role models for the development of premium healthcare in China," he said.
Building for two of the hospitals will start in the first quarter of 2016. Construction of the complex housing the third hospital has already begun and should be completed by 2018.
While state-run hospitals still dominate the market, there has been an explosion in the number of private facilities over the past few years as China's government relaxed rules for private investment.
This has seen the entry of firms including U.S.-based Chinaco Healthcare, Germany's Artemed Group, China's Shanghai Fosun Pharmaceutical Group Co, investment firm TPG Capital Management LP and property developers China Vanke Co and Evergrande Real Estate Group.
China's hospital privatisation drive still faces hold-ups, however, with a lack of doctors willing to leave the public sector and push-back from state-owned institutions and companies hindering reforms.
IHG, which has operated healthcare projects in over 50 countries, said it will appoint foreign specialists to act as directors for the three hospitals and select top doctors to ensure high quality of care.