Why Are Chinese Medical Device Companies Flocking to the Middle East as Exports Surpass RMB 160 Billion?
In the first half of 2024, influenced by various factors, tendering and procurement activities for medical equipment in China continued to be delayed, resulting in a temporary backlog of market demand.
Nevertheless, China’s medical device industry continues to maintain an overall upward trajectory.
On the one hand, the domestic consumables market was not affected by delayed bidding processes; with surgical volumes increasing by 8% year-on-year, performance growth was significant. Among typical industry enterprisesIn China, MicroPort EP's revenue in the first half of the year increased by 39.57% year-on-year, Huitai Medical's revenue grew by 27% year-on-year, and HeartCare Medical's revenue rose by 26.63% year-on-year.
On the other hand, medical device companies are ushering in new revenue opportunities in overseas markets after years of strategic expansion.First Half of 2024,China's total medical device exports amounted to $22.976 billion (approximately RMB 163.6 billion)., representing a year-on-year increase of 3.12%. Among them, Wandong Medical’s overseas sales revenue increased by more than 100% year on year; Yuwell Medical’s overseas revenue grew by 30.19% year on year; United Imaging Healthcare’s international revenue rose by approximately 30% year on year; Mindray Medical’s international revenue from its IVD business increased by over 30%; and Pumen Technology’s international revenue from its IVD business grew by 27% year on year.
Behind these data, the logic of medical device companies expanding overseas is also undergoing a transformation.
First, the growth rate of China's medical device exports to traditional major markets such as Europe, the United States, and Japan has slowed down, or even declined year-on-year.According to data from China Customs, in 2023, the value of China’s medical device exports to the U.S. market decreased by 19.2% year-on-year, to the Japanese market by 26.2%, to the German market by 40.8%, and to the UK market by 46.1%. A review of the financial reports of domestically listed medical device companies reveals that sales of many companies’ products in markets such as the United States, Europe, and Japan were affected to varying degrees;
Second, China's exports of medical devices to emerging markets in the "Belt and Road" countries have surged.According to China Customs data, in the first quarter of 2024, China’s medical device exports to the United Arab Emirates increased by 23.41% year-on-year; exports to Turkey rose by 9.68% year-on-year; and exports to Saudi Arabia grew by 8.34% year-on-year. In the first half of the year, export value to Iraq increased by 31.43% year-on-year.
For instance, Neusoft Medical has deployed hundreds of large-scale medical devices in the Middle East; medical imaging products from companies such as United Imaging Healthcare and Mindray have entered multiple top-tier hospitals in the region; MGI Tech has sold its T20 ultra-high-throughput sequencer, part of its “Super Sequencing Factory” solution, to the UAE-based healthcare technology company Prepaire Labs.
Third, against the backdrop of slowing growth in existing overseas markets, Chinese enterprises have identified the Middle East as an overseas region with significant growth potential.. Since the beginning of this year, economies in traditional European and American countries have shown signs of weakness, while the Middle East has emerged as a rare bright spot in the global market. An increasing number of domestic medical enterprises have set their sights on the Middle Eastern market, positioning it as a core destination!
It can be said that the Middle East has become the latest hotbed for medical innovation enterprises expanding overseas.
The Middle East is a generalized geographical concept. In the narrow sense, the Middle East typically comprises 17 countries and regions, covering an area of over 15 million square kilometers and home to a population of 434 million.
Benefiting from abundant local oil resources, the Middle East ranks among the world’s leaders in both economic scale and per capita income., indicating that the region has strong healthcare payment capacity.
Image source: PHBS Think Tank
The Middle East has a relatively young population age structure.According to United Nations projections, approximately 60%–80% of the population in the Middle East will be under the age of 30 between 2020 and 2050. This indicates a relatively small elderly population in the region, resulting in a smaller base for age-related diseases and consequently lower demand for related medical services.
However, influenced by local dietary and lifestyle habits,The Middle East region has a high incidence of cancer, respiratory diseases, cardiovascular diseases, diabetes, and obesity.. Taking Saudi Arabia as an example, the prevalence of obesity exceeds 40%, and approximately 18% of adults suffer from diabetes. Furthermore, ischemic heart disease, stroke, chronic kidney disease, lower respiratory infections, liver cirrhosis, diabetes, chronic obstructive pulmonary disease, congenital anomalies, and neonatal disorders have become the leading causes of death among Saudi residents.
Meanwhile, due to the high rate of consanguineous marriages in Saudi Arabia, the incidence of recessive genetic disorders is also significantly elevated. For instance, while the global prevalence of blood disorders such as thalassemia is merely 0.2%, the rate in Saudi Arabia reaches as high as 2%, representing a tenfold increase.
Driven by local incidence rates, the Middle East exhibits high demand for medical devices such as blood glucose meters, continuous glucose monitoring (CGM) systems, insulin pumps, surgical instruments for obesity treatment, chronic disease management devices, cardiovascular interventional devices, neurointerventional devices, respiratory interventional devices, in vitro diagnostics (IVD) including genetic testing, and medical imaging equipment.。
Furthermore, supported by factors such as policy support, the influx of private capital, and growing demand for medical services, the market size of medical devices in the Middle East has entered a phase of rapid growth.
In terms of policy,Saudi Arabia’s “Vision 2030” positions healthcare as a key national strategy. Under this strategy, the Kingdom plans to invest over $65 billion in developing medical infrastructure, restructuring healthcare services and insurance, establishing 21 “health clusters,” and expanding the provision of e-health services. To date, the Saudi Ministry of Health has launched two clusters: Riyadh First Health Cluster and Riyadh Second Health Cluster.
The UAE has explicitly identified healthcare and pharmaceuticals as a key development priority under its “AED 300 Billion Operation.” Under this initiative, the Emirates Development Bank will provide AED 30 billion (approximately RMB 58.1 billion) in funding support over five years to promote the growth of priority industrial sectors. Additionally, the UAE has formulated strategic plans such as the Abu Dhabi Healthcare Strategy and the Dubai Health Strategy to further increase investment in the healthcare sector.
The influx of private capital is also rapidly driving the development of the healthcare industry.The Saudi Ministry of Health stated, “Currently, there are 19 public-private partnership (PPP) projects being implemented in Saudi Arabia, with a total investment exceeding $2.9 billion. Over the next five years, the number of PPP projects in the country’s health services sector will exceed 100, with private sector investment reaching $12.8 billion.”
Saudi Arabia is also attracting private capital through measures such as privatization and optimizing the business environment. For example, it plans to privatize 290 hospitals and 2,300 primary healthcare centers by 2030 to attract private investment.
It is important to note that there are significant differences among the 17 countries and regions in the Middle East in terms of economic development, population size, business environment, market access, and policy conditions, resulting in distinct healthcare markets across the region.
For instance, the United Arab Emirates boasts a robust healthcare infrastructure and high-end, premium medical service capabilities, leveraging these strengths to establish Dubai and Abu Dhabi as global destinations for medical tourism, attracting patients from around the world. Its areas of competitive advantage in medical services include cosmetic surgery, cancer treatment, ophthalmology, and dental care.
Saudi Arabia, characterized by its relatively weak medical infrastructure, is currently experiencing a period of rapid development driven by ongoing reforms. According to research reports, the Saudi medical device market is projected to reach RMB 68 billion by 2030, with a high compound annual growth rate (CAGR) expected between 2025 and 2030.
In the past, companies expanding into the Middle East typically established subsidiaries or regional headquarters in Dubai or Abu Dhabi, United Arab Emirates. However, following its reform and opening-up initiatives, Saudi Arabia has introduced a Regional Headquarters Program. Under this program, foreign companies that have not established their regional headquarters in Saudi Arabia but have set them up elsewhere in the Middle East and North Africa (MENA) region will be prohibited from participating in Saudi government projects and will be ineligible for Saudi government support policies.
This requires healthcare companies aspiring to enter the Middle East market to conduct thorough research and preparation in advance, given the strong correlation between the healthcare sector and government policies.
The Middle East market boasts broad prospects and rapid growth, yet expanding into the region presents numerous challenges.
I. The legal, investment, and business environments in the Middle East are complex, posing potential risks for Chinese enterprises.Constrained by differences in culture, language, and other factors, Chinese medical enterprises have conducted relatively few studies on the Middle East region, leading to insufficient anticipation of potential risks and emergencies.
VCBeat learned from contacts in the Middle East that a Chinese medical device company had previously fallen victim to a million-dollar fraud involving medical supplies in the region. Additionally, a Chinese businessman operating in the Middle East revealed, “There are certain bad actors in the local market who use the promise of expanding professional networks as bait, causing companies to incur substantial costs with no tangible benefit to their business.”
It is also worth noting that Saudi Arabia is currently undergoing a period of reform and opening-up, characterized by incomplete policies, inconsistent implementation, and a lack of standardization in social governance. Meanwhile, the country’s medical infrastructure remains weak, yet it is developing rapidly, presenting numerous opportunities. In contrast, the United Arab Emirates (UAE), having been open to the outside world for a longer period, enjoys distinct advantages in its business environment and social governance, which have attracted a large number of multinational healthcare companies. However, this high level of openness has also led to more intense market competition.
II. Limited Awareness of Chinese Brands in the Middle East Poses Challenges for Domestic Medical Enterprises Entering the Market。
It is understood that European and American medical enterprises have entered the Middle East market for many years and conducted long-term brand promotion locally, resulting in significant market influence. In contrast, Chinese medical enterprises have only recently entered the Middle East market, where there remains a stereotype of “low price, low quality” associated with domestically produced medical devices.
“An industry insider with experience in expanding into the Middle East market stated, ‘Previously, when entering the Middle East market, we were typically unable to engage directly with local hospitals. Instead, we relied on local distributors to communicate with and supply products to these hospitals. Local hospitals and physicians lacked trust in Chinese brands.’”
Selling through distributors is a common sales model. However, finding suitable and reliable distributors in the Middle East is not easy. For example, most distributors require Chinese companies to sign orders first to demonstrate their strength and prove that their products have advantages before they will cooperate and help promote the products. In addition, the local distributor market is mixed with good and bad players, requiring Chinese companies to carefully screen and conduct in-depth investigations.
III. Intense Competitive Pressure in the Middle East, the local market features not only multinational giants but also indigenous Middle Eastern enterprises, resulting in high entry barriers for Chinese companies. For Chinese medical enterprises, multinational corporations hold brand advantages, while local firms benefit from localization and policy advantages. Consequently, Chinese medical companies must enter the market from scratch.
Faced with various challenges, participating in medical device exhibitions in the Middle East is a viable approach. Through reputable trade shows, companies can identify professional, suitable, and reliable distributors, and even secure orders directly on the exhibition floor.
In the Middle East, Arab Health is the largest and most professional medical equipment exhibition. Since its inaugural edition in 1975, the event has seen year-on-year growth in its scale, number of exhibitors, and visitor attendance, earning it a longstanding reputation among hospitals and medical device distributors across Middle Eastern countries.
The 49th Arab Health, held on January 29, 2024, attracted more than 3,000 medical device companies and over 80,000 visitors. Among them, 710 companies were from China.
During the exhibition, several Chinese companies signed orders on-site or established partnerships with local hospitals. For instance, United Imaging Healthcare entered into cooperation agreements with Middle Eastern healthcare giants such as the National Center for Cancer and Blood Diseases in Saudi Arabia and the Al Mana Healthcare Group; Mindray Medical signed a strategic cooperation agreement with Egypt’s largest private hospital group, Cleopatra Hospitals Group.
Driven by its strong reputation, demand for the 50th Arab Health exhibition (Arab Health 2025), held in January 2025, was exceptionally robust. Reportedly, the cost for the smallest booth space of 9 square meters exceeded RMB 110,000, which was not only expensive but also located in a relatively remote area.
In response, VCBeat and its co-organizers have launched the “Arab Health 2025 VCBeat Global Business Study Tour + Exhibition Program,” designed to reduce costs, enhance efficiency, foster collaborative strength, and facilitate collective international expansion. Chinese companies can participate in Arab Health 2025 for just RMB 59,800.
Specifically, VCBeat collaborated with the organizers to curate the “China Healthcare Innovation Pavilion,” a shared exhibition space. Through this pavilion, Chinese healthcare companies were able to exhibit at Arab Health 2025 at a lower cost, while the larger, consolidated booth secured by numerous participating enterprises occupied a more prominent location, attracting greater visitor traffic.
VCBeat is extending invitations to enterprises across the upstream and downstream of the industry. These companies can also build mutual trust and close relationships during overseas study tours, thereby creating business opportunities.
During this trip, VCBeat will also connect participating companies with in-depth resources and invite Chinese enterprises to engage in extensive exchanges with local officials, distributors, investors, physicians, and other industry professionals to gain critical insights into market access, product sales, hospital procurement, and investment. Additionally, VCBeat will organize events such as the “VCBeat Global Expansion – China Healthcare Innovation Enterprise Reception Day” during the exhibition to attract local clients.
In addition to the exhibition schedule, VCBeat will also lead its overseas-bound clients on visits to multiple medical device distributors in Dubai for in-depth exchanges. For companies planning to enter the Middle East market, the “Arab Health 2025 VCBeat Overseas Business Study Tour + Exhibition Program” is not to be missed. Interested enterprises are welcome to contact VCBeat.
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