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Building the future of Healthcare

Healthcare innovations from 5G solutions to smart hospitals and precision medicine open a wealth of opportunity in a fast-growing market.

In March 2019, China passed a milestone in its mission to achieve quality healthcare for its 1.4 billion people – in a way that drove home its potential in breathtaking fashion. The achievement showcased its growing medical prowess and global edge in high-speed wireless technologies.

With the assistance of a 5G network, a surgeon in southern Hainan province manipulated robotic arms to implant a neurostimulator into the brain of a patient 3,000 kilometers away in Beijing. After the successful procedure, the surgeon told state media that the low-latency 5G transmission allowed a “nearly real-time” operation: “You barely feel the patient is 3,000 kilometers away," said surgeon Ling Zhipei.

The breakthrough has implications that go beyond digital pyrotechnics. 5G healthcare will make surgery accessible to people in remote corners of China, and save lives after earthquakes with emergency operations. One of the most exciting 5G applications is primary care, as innovations such as Ping An’s Good Doctor app – which enables remote AI-powered diagnosis and treatment of ordinary ailments – gain speed and efficiency in the new frontier of telemedicine. Meanwhile, 5G-enabled hospitals will bring improvements in productivity, cost-control and collaboration – a critical factor as China seeks to rein in healthcare expenses and improve hospital quality.

5G Connection by 2025

Without a doubt, China faces monumental healthcare challenges in its economic ascent. They include an overburdened hospital system, insufficient primary care, unpredictable doctor quality and skyrocketing insurance costs. Medical expenses are forecast to reach nearly $2 trillion by 2030. China is tackling these challenges through research, innovation, proactive policy and hospital modernisation – all factors that will boost quality of life and open a trove of investment opportunity.

Koji Nagatomi, COO of Mitsui’s Healthcare & Services Business Unit. Koji Nagatomi, COO of Mitsui’s Healthcare & Services Business Unit.

Synergies for a bright tomorrow
Mitsui & Co. partnered with China Resources, one of the leading conglomerates with business in the healthcare field, and leading PE firm HOPU Investments to launch a $1 billion Chinese healthcare investment fund – CMH Healthcare Fund – out of a belief that fostering groundbreaking healthcare solutions can enhance millions of lives while harnessing a market expected to be worth $2 trillion by 2030. It’s part of Mitsui’s broader strategy to establish Asia’s largest healthcare ecosystem through its partnership with IHH Healthcare Berhad, Asia's largest private hospital group.

“In this new partnership, we aim to contribute to new discoveries and solutions for China’s fast-growing healthcare market, leveraging existing business synergies, to help create a society in which people lead healthy and fulfilling lives,” says Koji Nagatomi, COO of Mitsui’s Healthcare & Services Business Unit.

It’s a collaborative vision that will be achieved through a pair of game-changing approaches, according to Liang Eric Hongze, Co-CEO of CMH Healthcare Fund. The first is development of private solutions that address the gap between supply and demand in the healthcare system – currently dominated by inefficient public services.

The second is astute and judicious funding of cutting-edge Chinese medical innovation: “Through 5G mobile networks, big data and AI technology, we can lift the relatively low level of China’s medical institutions and service providers,” says Liang. “With these solutions, we can solve the problems of uneven healthcare distribution and efficiency challenges in the medical system.”

Healthy China 2030
The government’s Healthy China 2030 initiative underpins the huge potential of China’s healthcare sector, offering benchmarks and incentives for building solutions. The programme pledges to build a healthy nation in the next 15 years, both through innovation and essentials such as modern primary care and hospital services. It is attracting brilliant Chinese minds – often from overseas careers in a “brain gain” phenomenon – to tackle China’s vital challenges of rapid greying, rising cancer rates and lifestyle issues such as obesity.

Liang Eric Hongze and Cliff Chau Left: Liang Eric Hongze, Co-CEO of CMH Healthcare Fund.
Right: Cliff Chau, Co-CEO of CMH Healthcare Fund.

“With the deepening of medical reform,” Deloitte says in a report, “the Chinese healthcare service industry will break through with multiple dimensions of innovation in the future.”

China’s commitment to engineer a healthcare transformation – bringing the well-being of its society in line with its economic might – promises to become one of the most important growth narratives of this century.

“China currently has less than 7 per cent of its GDP in healthcare, whereas the United States has 19 per cent,” says Cliff Chau, Co-CEO of CMH Healthcare Fund. “In the next decade, the proportion of China’s GDP in healthcare is projected to increase to 12 per cent. This represents an enormous investment opportunity.”

One key priority is oncology research. China’s cancer rates have soared due to chronic pollution and unhealthy habits such as smoking and adoption of Western diets. While China has 20 per cent of the world’s people, it accounts for nearly a quarter of total cancer cases and 30 per cent of cancer deaths. That provides urgent impetus for developing next-generation cancer treatments such as immunotherapy, which stimulates the body’s natural defences to fight tumours.

Today China’s immuno-oncology market size is only $800 million.
By 2025 it is forecast to be $23.1 billion.

Cliff Chau, Co-CEO of CMH Healthcare Fund

Limitless future with valued partners
CMH Healthcare Fund will be an important strategic component of Mitsui & Co.’s overall mission to ensure that the region’s economic advance is rooted in healthy quality of life.

In order to succeed, Mitsui has long followed a philosophy that strong local partners hold the key to opportunity in any market – enabling synergies between on-the-ground expertise and Mitsui’s global investment and network capabilities. Mitsui’s partner, China Resources, operates over 110 medical institutions and is a leader in elderly care and pharmaceuticals through their subsidiaries. These are all critical areas in promoting the well-being of China’s rapidly aging population

Healthcare Ecosystem

“Local partners are absolutely critical,” says Mitsui & Co.’ s Nagatomi. “By forging the team of China Resources, HOPU and Mitsui & Co., we bring together preeminent talent in healthcare know-how, hospital management, investment acumen and M&A prowess.”

And the story goes beyond healthcare. At heart, Mitsui & Co.’s partnership with China Resources is a comprehensive vision for Chinese development that makes life better for millions of people.

“The CMH Healthcare Fund is just the first salvo in our journey together,” says Nagatomi. “We’re moving to jointly develop enterprises in ecology, energy, infrastructure, nutrition, retail, tech innovation – and more – in a dynamic Chinese market.”

Mouse over and click the infographic to see the potential China represents and the challenges it faces in its journey to achieve high-quality healthcare through technologies.

The Challenges The Potential The Solutions The Successes
The Challenges The Potential The Solutions The Successes

About Mitsui & Co.
Mitsui & Co. is one of the largest global trading and investment companies. Founded in Japan in 1947, we maintain a unique, unobstructed view of international markets through its worldwide network spanning across 66 countries and regions, with a diversified business portfolio stretching across six key sectors; Metals, Machinery & Infrastructure, Chemicals, Energy, Lifestyle, Innovation & Corporate Development.