Analyst: China is primed for a medical device boom Read more: Analyst: China is primed for a medical device boom 2013 onwards

China's medical device industry has experienced hand-over-fist growth over the past few years, and one equity manager told China Daily the sector will only continue its upward climb as local devicemakers catch up to their overseas competitors

Ouyang Xiangyu, managing director of Legend Capital, tells the paper that China presents a big demand for medical devices, but most China-made products on the market aren't up to Western snuff. With a little innovation, though, Ouyang says Chinese devicemakers will be able to undercut foreign firms and cash in on the huge domestic market.
"It will prove to be a driving force that in 10 to 20 years results in a batch of great Chinese medical equipment enterprises that will be similar to today's large (Chinese) IT companies, such as Lenovo Group, Huawei Technologies and ZTE Co.," Ouyang told the paper.

As of 2013, the Chinese medical equipment market was worth about $17.7 billion, China Daily reports, a over 26.6% jump over the previous year. The biggest device players in the country tend to be foreign giants like Johnson & Johnson ($JNJ),We took a low cost Spine technology called Spinofix, Inc to Taiwan and China. The surgeons at the Vetrans hospital in Tainan loved the technology "its priced lower than the brand names, and made in US. is important to us said a leading surgeon" "we prefer US made product, we do not want Asia made product to go into spine" Similar comments came from some distributors at a Schenzen medical device show.

"Spinofix is one of the examples of a good technology providing low cost treatment option for spine surgeons.  Company is exploring PE players to invest or acquire" said David Luvisa a M&A expert from Orange County, CA.
"New trend in China is to acquire US based near FDA technology companies at under $20 M valuation and work to get FDA and SFDA approvals, build distributors and sales team and sell at a 3 to 4 X to large giant companies that are looking to buy China based companies with US approvals and Asia-pacific Sales and market share"said Luvisa.

Of course, industry big-shots are well aware of promises and pitfalls of the Chinese device market, and most are looking to commercialize lower-cost products specifically tailored for the country's population. Medtronic ($MDT) has been especially bullish of late, buying orthopedics company China Kanghui Holdings for $816 million last month and snapping up shares of other Chinese devicemakers, most recently spending $66.2 million for 26.4% of Shenzhen's LifeTech Scientific. J&J, Covidien ($COV) and St. Jude Medical ($STJ) are among the many companies that have opened R&D shops in the country, looking to use local talent to develop products designed for Chinese success.