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Forward-looking

　　As an emerging industry closely linked to human life and health, the medical device sector has always held significant strategic importance. In 1963, China successfully developed its first mass-produced Type-A ultrasound instrument, paving the way for independent R&D of ultrasound diagnostic equipment in China. In 1984, China took the lead nationwide in implementing comprehensive industrial management for medical devices, with the relevant administrative work being uniformly carried out by the National Medical Products Administration. By 2020, thanks to continuous technological breakthroughs and rapid industry growth, China had become the world’s second-largest medical device market, second only to the United States. From a state of utter poverty to a thriving ecosystem spanning various fields, and gradually achieving breakthroughs in core areas and critical technologies, China’s medical device industry is moving away from its previous position of merely “following behind” and is heading toward a comprehensive, high-end “greater healthcare” landscape characterized by full-scale domestic substitution.

　　In June, to support “hard-tech” medical device companies that have not yet achieved a certain scale of revenue in listing on the STAR Market, the Shanghai Stock Exchange issued “Guidance No. 7 on the Application of the STAR Market Issuance and Listing Review Rules—The Fifth Set of Listing Standards for Medical Device Companies,” which clearly defines the listing standards for medical device companies on the STAR Market and provides detailed regulations on the scope of core technology products, phased achievements, and market potential. This standard does not require companies to be profitable, but it does demand high levels of R&D capability and valuation. Therefore, for innovative medical device companies—especially those still in the clinical trial stage—it represents a highly tailored set of criteria.

　　The upgrading of China’s medical device industry is well underway. Innovation has become the major trend driving the development of medical device enterprises. Without technological innovation and the establishment of their own competitive barriers, these companies will only lose their foothold in a rapidly changing market. Relevant data show that since the National Medical Products Administration (NMPA) launched the fast-track approval pathway for medical devices in 2014, as of the end of last year, a total of 351 medical devices had entered the special review process for innovative medical devices, among which 134 innovative medical devices from 113 companies have been approved for market launch.

　　The demand for disease treatment and prevention continues to rise. Precision diagnostics and minimally invasive therapies in modern medicine, as well as the intelligent, convenient, and multifunctional nature of home healthcare services, are constantly driving innovation in medical devices. As China’s healthcare system continues to develop and improve, the market size for medical devices will keep expanding, and advancements in technologies such as artificial intelligence and the Internet of Things will inject fresh vitality into this sector.

Moving forward with a burden.

　　According to forecasts by relevant institutions, China’s medical device industry market size will exceed 2.5 trillion yuan by 2027, with an annual compound growth rate of 18%. Driven by the optimization and upgrading of national policies, the increasingly prominent issue of aging population, rising economic consumption power, and growing awareness of health management, China’s medical device industry is continuously diversifying its product categories and has entered a phase of rapid development, offering tremendous market growth potential. Moreover, as industry regulations and standards become stricter and more comprehensive, the requirements for enterprises in terms of R&D capabilities, revenue-generating capacity, risk resistance, and sustainable development are also increasing. This will accelerate industry consolidation and standardization. With the accumulation of innovation and capital, China’s high-value medical devices have made significant progress, driven by innovation-led overall technological transformations and the maturation of industrial chains.

　　This is an essential process through which many industries are moving toward independence and self-reliance—a vivid reflection of today’s entire medical device industry. The demand is robust enough to drive industrial development, yet achieving breakthroughs in key technologies in the high-end segment is no easy feat. Compared with the 1950s and 1960s, China’s medical device industry has undergone earth-shaking changes. Nevertheless, companies remain “small and dispersed,” with most being small- and medium-sized enterprises, resulting in low industry concentration. Moreover, the overall level of domestic substitution for medical devices remains relatively low—particularly in the field of high-value medical consumables. This is precisely why innovation has become a central theme, both from an internal industry perspective and driven by policy initiatives.

　　When it comes to medical devices, the ultimate touchstone is the user experience of physicians—and in some cases, even the patients themselves. Therefore, beyond “hard technology” and “hard knowledge,” the innovation and creation of medical devices largely hinge on the “soft knowledge” of user experience. Clinical needs are the very lifeblood of medical devices. Only by grounding innovations in these needs can further development evolve into the “hard demands” that the market truly calls for. Another crucial yet often overlooked aspect is the emotional value that medical devices can offer. In common perception, medical devices tend to be seen as cold, metallic machines with a glossy finish—associated with illness, pain, and coldness. Yet, ideally, medical devices should possess both practical utility and aesthetic appeal. For instance, extracorporeal surgical systems can help alleviate patients’ fears arising from unfamiliarity and uncertainty; implantable devices, meanwhile, can minimize damage to surrounding body tissues by ensuring even distribution of stress, thereby enhancing fatigue resistance.

　　In short, while the outlook appears promising, the reality is fraught with numerous challenges. Currently, governments around the world are working hard to reduce healthcare costs and hope that hospitals can deliver greater value by achieving better medical outcomes. Therefore, medical device companies must address real-world healthcare issues and unmet health needs through the concerted efforts of all relevant parties, enabling everyone to join forces and accelerate the pace of domestic substitution.

Afterword

　　Every high-tech industry is the same. Competition and development among enterprises follow the same long-term logic or value principles. Given enough time, you’ll naturally see it emerge.