Australian Business Forum helps Australian SMEs and businesses to understand the Chinese market and refine their China strategy. http://abf.events/ ABOUT THE PRESENTATION Presentation by Lorraine Chiroiu, Chief Industry Affairs Officer and Head of AusBiotech’s China Programs - AusBiotech Engaging with China Presentation on: - Facilitating medical devices trade with China by breaking down the major barriers to entry - Providing information about intellectual property (IP) management in China and outline the types of business structures that are possible for Australian companies entering China Presented at the Fortune Forum 2015 Australian Summit

1. Lorraine Chiroiu
Chief Industry Affairs Officer
& head of AusBiotech’s China Programs
AusBiotech engaging with China

2. My presentation today…
• AusBiotech’s China
Projects – overview
and some details
• How we prepared to
deliver those
projects
• What we learnt
along the way

3. Overview of AusBiotech project
‘Australian Medical Devices &
Diagnostics to China’
Asian Business Engagement (ABE) Program
Australian Trade Commission initiative

4. Project overview
‘Australian Medical Devices & Diagnostics to China’
Key elements:
•Facilitate medical devices trade with China by breaking down the major barriers
to entry
•Provide information about intellectual property (IP) management in China and
outline the types of business structures that are possible for Australian
companies entering China
Phased over three years, the project included:
•An extensive report (the China Guide)
•A training module for Australian companies
•A directory of Australian medtech companies
•AusBiotech-led business mission to China in 2016

5. Survey overview
‘Australian Medical Devices & Diagnostics to China’
• Online survey to gauge the extent of barriers to doing
business in China and expertise levels.
• Results will be used to inform the development of support
and resources (China Guide, training module and business
mission) for Australian companies.

6. Survey results
‘Australian Medical Devices & Diagnostics to China’
• 33% have active commercial operations, relationships or partnerships
• 60% of respondents had worked in or with China
• Companies are most interested in:
– establishing commercial operations and channels to the China
healthcare market (46%)
– entering JVs with local partners (40%)
– assessing manufacturing capacity and capability (26%) and
– attracting investment to fund ex-China operations (26%)

7. Survey results
‘Australian Medical Devices & Diagnostics to China’
Companies were interested across all the proposed areas for
the resources. The areas of most concern were:
•Negotiating commercial agreements with Chinese companies/ partners
(73%),
• investment sources available and how they can be accessed (66%)
• how to protect intellectual property (60%) and
•Australia/ China government support available (60%)

8. ‘Australian Medical Devices &
Diagnostics to China’

9. China Guide Advisory Group
• IP expertise: Dr Jenny Petering, FB Rice
• Business structure advice: Helen Fisher, Deloitte
• Medtech company with experience in China: Lisa Renkin, The Burnet Institute
(Nanjing BioPoint Diagnostic Technology) + Dr Julian Chick, Admedus (formerly
Allied Healthcare Group)
• Regulatory/clinical trials experience in China: Meg Hooton, Quintiles (Beijing),
and Lucy Xiao, Brandwood Biomedical
• Health environment expert: Neale Jones, LEK Consulting
• Legal expert (other than IP) with experience or linkages in China: Duncan Hart,
Duncan Hart Consulting + Robin Chambers, Chambers Lawyers/ChinaHouse
• Business consultant assisting companies to enter China: Rob Scott, BlueSky China
Partners (Shanghai) + Luke Treloar, KPMG (Beijing)
• Industry expert: Dr Anna Lavelle, AusBiotech
• Project Manager: Lorraine Chiroiu, AusBiotech

10. ‘Australian Medical Devices &
Diagnostics to China’
The China business planning workshops
•Held in Brisbane, Melbourne and Sydney
•40 medtech companies attended
•The workshops were provided by Deloitte, FB Rice, China BlueSky Partners, the Burnet Institute, Brandwood
Biomedical and Zhongxia Xubo Lawyers.
The China business mission 2016
•16 companies have expressed interest
•Visiting Tianjing, Beining, Nanjing and Shanghai

11. ‘Australian Medical Devices &
Diagnostics to China’
Directory of Australian medtech companies
www.ausmedtechdirectory.org.au/

12. Why the focus on medtech?
• The Australian medical technology industry 500 – 800
companies
• Most of these companies are micro or small enterprises
• Magnitude of China market
• China’s new focus on high-tech sectors + increased focus on
research and development (R&D)
• Healthcare spending in China + ageing population,+ rising
incidences of chronic diseases
• Emphasis on innovation and quality care, designed to benefit
Chinese society as a whole.

13. Devices & diagnostics market in China
• The US $17 billion medical technology market in China is one
of the fastest growing in the world.
• Ranks fourth in the world and is expected to double in size
by 2018.
• Growth in device use will be underpinned by improving
household economics and government policy
• 2th FYP, the Chinese government investing in R&D + target
of developing 40 to 50 medical device companies.

14. Trends and opportunities
• Price-sensitive marketplace where sales volumes could be
much smaller per account, but the total market is much
larger.
• Example of trend is China’s experience with drug-eluting
stents.
• Chinese companies have increased their focus on developing
proprietary products and building R&D capability by
leveraging support from multiple parties.
• Companies are turning to domestic manufacturing to
harness the value segment’s potential.

15. China’s patent system
• China has a sophisticated but young patent system based on
European law.
• Rights are enforceable
• Still enforcement issues, but China is working towards a
stronger patent system.
• The protection of patents major barrier for international
businesses.
• In 2012 more patents filed in China than in any other
country, internal driver for effective patent protection.

16. China’s patent system, value of
patents
• Chinese patents are considered an essential foundation-
stone upon which partnerships and collaborations should
rest.
• ‘High and New Technology Enterprise (HNTE)’ status qualify
for a lower corporate tax rate (15% instead of the standard
rate of 25%).
• The Chinese government also provides incentives for
companies involved in R&D by subsidising the costs of patent
applications filed by Chinese applicants.

17. Chinese venture capital
• Deal flow healthy and China VCs have invested significantly
into life sciences - average of $1 billion per year.
• Interest has expanded to the new growth opportunities
available in the medtech sector.
• Chinese biotech companies looking outward to ‘in-license’
technologies from the West.
• Chinese local governments seeking new sources of revenue
are also keen to offer grants, tax incentives, and world-class
research facilities to attract research companies to their
locations and technology parks.

18. ausbiotech.org