Chen Xikun: 2018 Marks the Dawn of China's Psychological Industry, with a Critical Shortage of Psychological Brokers

On September 17, the 2018 China Psychological Industry Expo (abbreviated as “Xinbohui”) concluded in Jimei District, Xiamen City.VCBeat (WeChat ID: vcbeat) conducted an exclusive interview with Chen Xikun, Secretary-General of the Organizing Committee for this year’s China Heart Health Expo. At this pivotal moment in the development of applied psychology, Chen shared his insights on the growth of the psychological services industry. VCBeat has summarized his key points as follows:

1. 2018 was the inaugural year of China's psychological services industry;

2. The mental health industry is currently standing at a rare window of opportunity;

3. Technical standards are a critical component of the mental health industry chain;

4. What the mental health industry truly lacks is psychological agents.

During the preparation and holding of the Heart Expo, Chen Xikun was extremely busy. He constantly shuttled through the vast exhibition hall of the Heart Expo, making special trips between the exhibition hall and the Psychology Industry Forum, hardly ever stopping. This was the first time that Chen Xikun and his team had organized an industry expo, and it was also the first time that psychologists across China had gathered together under the banner of industry development.

The exhibition featured 265 standard booths, including 21 in the special exhibition zone. A total of 527 exhibitor representatives checked in on-site. More than 500 high-tech psychological service products, with a total value exceeding RMB 40 million, were showcased. The estimated value of transactions and procurement intentions surpassed RMB 180 million. In addition to product displays, the Mental Health Expo hosted over 40 experiential activities and public science lectures, attracting nearly 20,000 attendees.

In fact, prior to the Mental Health Expo, most people had little understanding of what constituted the psychological industry or what a psychological industry expo entailed. Two hundred years ago, psychology was first defined as an academic discipline. Over a century ago, psychology was introduced to China.For a long time, the application and development of psychology in China have been fragmented. There is a lack of collaborative connections between institutions and practitioners, who naturally view each other as rivals, engaging only in conflict rather than communication.

When the idea of hosting the Mental Health Expo was first proposed, Chen Xikun felt apprehensive. “I personally have no reservations, but I worry that others may not understand.” A former sales representative for psychological equipment, Chen has been immersed in the industry for over a decade and firmly believes that industrialization is the inevitable path to revitalizing the mental health sector.

Chen Xikun is currently employed at Zhongkepu (Beijing) Technology Co., Ltd. (“Zhongkepu”), a company that leverages the Institute of Psychology, Chinese Academy of Sciences, to commercialize psychological technology achievements. Mr. Chen’s role involves bringing to market interactive regulation electronic products as well as specialized equipment for assessment and training.For many people, Chen Xikun’s work is somewhat baffling, as the products he sells are not commonly encountered in daily life. Chen admits that despite his deep understanding of the industry’s rules, the market for psychological equipment is challenging to navigate. However, since 2018, he has clearly sensed a warming trend in the market.

Previously, in 2016, an initiative was proposed at the National Health and Hygiene Conference: “We should strengthen basic research on mental health issues, conduct effective science popularization of mental health knowledge and mental disorders, and standardize the development of mental health services such as diagnosis, treatment, and psychological counseling.”In 2017, the former National Health and Family Planning Commission, in conjunction with 22 other departments, issued the “Guiding Opinions on Strengthening Mental Health Services,” making psychology professionals feel the favorable winds of policy support. In the same year, two leading companies in the mental health industry—Chenggong Zhidao and Xin Hai Daohang—were listed on the New Third Board. The entry of these industry leaders into the capital market triggered a butterfly effect, attracting more investment and prompting institutional investors to conduct due diligence on some small and medium-sized players. Despite the broader capital winter that has persisted since last year, the chill seems less severe for companies in the mental health sector.

Chen Xikun believes that the root cause of this market upswing lies in policy favoritism. In the past, hosting events in the psychological industry was regarded as engaging in public welfare.

“The policy window has just opened, and I predict that government procurement efforts will intensify in the future.” Although this strategic opportunity has arrived, psychological science is a relatively nuanced field in its practical application, and relevant government departments still lack sufficient understanding. Chen Xikun believes that now is the right time to host a comprehensive showcase of psychological services, an objective that aligns with the mission of one of the organizers—the Science Popularization Committee of the Chinese Psychological Society.

In early August, the Heart Expo officially launched its exhibitor recruitment. Just as Chen Xikun had initially feared, most potential exhibitors struggled to understand what the Heart Expo would entail.Almost all of the companies confirmed for the first batch of exhibitors were institutions familiar to Chen Xikun. Based on their trust in him, they believed in his judgment even without fully understanding the background and context of the Heart Health Expo. However, the majority of the prospective invitees were unfamiliar enterprises, with whom Chen Xikun and his team struggled to find appropriate channels or protocols for communication.

“Many of them are adopting a wait-and-see attitude.” According to Chen Xikun, the founders of Chenggong Zhidao and Xinhai Daohang were both invited as guest speakers at the Mental Health Industry Forum, held in parallel with the Mental Health Expo; however, their products were not featured at any booths at the Expo.Hesitation toward the inaugural Heart Health Expo was a common sentiment among many industry insiders. “However, they (the relevant heads of Xin Hai Navigation and Success Path) stated that they would be the first to register as exhibitors for the next Heart Health Expo.” Chen Xikun was clearly satisfied with this outcome. “Many smaller-scale exhibiting companies expressed that, having been in the industry for over a decade, they had long hoped for an industry-wide flagship event. Now that it has finally arrived, they intend to participate in every future edition.”

Breaking new ground is indeed arduous, but one successful example can inspire many others. Just before Chen Xikun rushed back to the exhibition hall for an interview with VCBeat, two prospective cities had already extended olive branches to Zhongkepu, expressing interest in hosting the second Heart Health Expo.

In fact, from Chen Xikun’s perspective, the success of the Mental Health Expo was both unexpected and entirely logical. The expo’s ability to achieve a breakthrough from zero to one is grounded in the accumulated foundation of the mental health industry itself. In terms of both talent and institutions, the sector has already amassed sufficient scale to support industrialized development.

How, then, can the psychological services industry achieve industrialized development? Chen Xikun shared his insights with VCBeat.

Chen Xikun believes that the key and foundation for the industrialization of the mental health industry lies in establishing technical standards.Mental health services follow a streamlined, end-to-end pathway: diagnosis first, followed by treatment, and concluding with outcome evaluation. Currently, psychological diagnosis largely relies on traditional assessment scales, which are subjective and lack standardized criteria. Introducing technological solutions at the front end of the mental health service workflow—using psychological devices to replace assessment scales for diagnosis—could serve as an appropriate entry point for standardizing mental health services.

The public’s lack of awareness regarding psychological equipment serves as a bottleneck constraining the introduction of such technologies. “Therefore, the industrialization of psychological services is ultimately hindered by a shortage of business-oriented talent.” To address this, Chen Xikun coined a new term, “psychological broker,” referring to professionals whose role is to bridge the gap between products and the market.Chen Xikun explained that the involvement of psychological brokers helps build professional trust in two ways. First, by having psychological experts focus solely on delivering professional services while leaving all business matters to the brokers, their professional image is strengthened. Second, assigning tasks to specialists enhances overall efficiency.

Chen Xikun keenly observed that, since the beginning of this year, policy support has invigorated the market, with industry summits on various themes being held successively, suggesting that the inaugural year of the psychological health industry has seemingly arrived.

At the Heart Expo Forum, Zhu Song, founder of Windy Original, a leading domestic camp education brand, pointed out that the leverage point for the psychological industry lies outside the industry itself. Chen Xikun also supported this view, arguing that an important hallmark of the industrialization of psychology is that it no longer serves as a vehicle but rather appears as a tool within various industries. This is akin to industrialization, where theories and technologies related to industrial manufacturing are not the subjects of trade; rather, it is the products that embody rich industrial theories and technologies that serve as the root cause of continuous transactions.

Chen Xikun outlined to VCBeat the three key pillars of the mental health industry as he sees it: talent, capital, and facilities. Indeed, when viewed from an industrial perspective, psychology can also be framed within classical economic paradigms, centering on activities driven by the scarcity of “people, capital, and resources.”

The difference lies in the fact that human resources, financial resources, and material resources in psychology have their own unique characteristics.

Chen Xikun believes that the talent pool in the psychological services industry should feature a dual structure comprising both technical and business-oriented professionals. Technical professionals refer to those who possess specialized theoretical knowledge and practical skills in psychology, engaging in work such as psychological counseling, psychotherapy, and psychological education. Traditionally, technical professionals were considered the entirety of the psychology workforce.So-called business-oriented talents, also known as psychological brokers mentioned earlier, must possess a certain level of psychological knowledge and a strong sense of identification with psychology. Meanwhile, they should have excellent business skills to focus on niche market demands and adopt reasonable methods to bring psychological products to the market.

To date, China’s reserve of technically skilled professionals has reached a considerably high level. There are already more than 1.3 million individuals holding Level 2 and Level 3 National Vocational Qualifications as psychological counselors, along with many others who have undergone substantial training at professional institutions and acquired practical skills through hands-on experience.Theoretically, China has a sufficient number of technical professionals in the psychology industry to serve the domestic mental health market, with over 50,000 registered psychological service institutions. However, there are very few practitioners who truly meet the requirements for psychological brokers.

Chen Xikun emphasized that the most critical factor hindering the development of the mental health industry is the shortage of psychological brokers. In the words of Researcher Gao Wenbin, Director of the Popularization Working Committee of the Chinese Psychological Society, the goal of psychology should be to make public demand for psychological services a basic necessity, akin to the demand for agricultural and sideline products. Achieving this goal naturally relies on a large workforce of psychological brokers.

Due to its unique characteristics, the mental health industry primarily derives its funding from two sources.

On one hand, there is funding generated from operational activities; on the other, there is funding from government procurement. As the range of psychological service offerings expands and social consumption upgrades, revenue from operational activities has been consistently growing. More notably, government procurement has become more active under policy incentives. Policies can promote government procurement from multiple angles, such as through fiscal budgeting, or by incorporating factors related to psychological development levels into relevant evaluation metrics, which would further drive government procurement.

Currently, the lack of suitable practice venues is a major constraint for many psychology professionals. The inability of numerous qualified mental health service providers to find appropriate spaces for their practice is also a significant reason for the shortage of high-quality psychological services.Since the beginning of this year, the mental health industry, bolstered by policy support, has found it easier to secure land resources. A common approach involves joint development of mental health industrial parks by governments and enterprises, providing essential support for the operations of mental health institutions. The Chongqing Xinhai Mental Health Industrial Park, jointly developed by the Jiulongpo District Government of Chongqing and Xinhai Navigation Group,Construction has been completed and the facility is poised for imminent operation. Furthermore, this Mental Health Expo facilitated a cooperative intent among the Jimei District Government of Xiamen, Electronics City, and Zhongkepu to jointly establish the Jimei Psychological Industry Park.

Chen Xikun believes that government efforts are key to addressing funding and venue constraints, while market forces are essential for tackling talent-related challenges.

In explaining to VCBeat how psychological brokers are driving industry development, Chen Xikun noted that the psychological equipment sector has undergone several iterations and now possesses a solid foundation for commercial promotion. Taking Zhongkepu’s mind-brain detector as an example, the earliest version featured basic functions and a bulky design. In contrast, the current improved 2.0 version not only collects users’ electroencephalogram (EEG) and galvanic skin response (GSR) data to assess mental health but also incorporates VR technology, appearing in the form of wearable smart hardware. This aligns closely with public demand for intelligent products and represents the type of product needed for the standardized development of the psychological industry. Furthermore, the 3.0 version currently under development will be more compact and offer more comprehensive functionalities.

Psychological brokers have connected the supply and demand sides of the mental health industry by breaking down barriers and optimizing services. Chen Xikun shared a case study in which his team helped promote the market adoption of Metacognitive Intervention Technology. Developed by Professor Jin Hongyuan’s team at Liaoning Normal University, this technology matured more than 30 years ago and remains the only psychological technique to have received a science and technology award. However, it was not until recent years, following the involvement of Chen Xikun and others, that the technology achieved widespread market promotion and application.

First, they helped Professor Jin Hongyuan’s team break away from conventional thinking and widely disseminate the key aspects of this technology to the public through the publication of a book.

Secondly, strengthen communication between the technical team and the target audience, arrange for core technical experts to participate in various industry forums, and make metacognitive intervention technology well-known among industry professionals.

Third, establish a standardized training system. Psychological products possess a certain degree of professionalism, imposing high demands on the professional competence of frontline personnel at the channel level. Previous management approaches were more extensive and less refined. With the involvement of psychological brokers, a rigorous system for training, assessment, and supervision of frontline staff has been established, ensuring the continuous improvement of their professional skills.

Practice has proven that a technology shelved for 30 years still holds substantial market potential.

Chen Xikun was thrilled about the holding of this Mental Health Expo. He posted on his WeChat Moments, “We may have inadvertently accomplished something significant.” Indeed, all initiatives advancing the industrialization of psychological services are significant endeavors. Under conditions of substantial uncertainty, having the courage to take a distinctive first step makes this year’s event even more commendable.