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Tuesday, October 24, 2017

Opportunities for Swiss Technology Companies in China’s Healthcare Industry

~ CEO, Swiss Centers China Mr. Zhen Xiao

Thank you and good morning ladies and gentlemen. As a Chinese who has spent the past 15 years living and working in Switzerland, I have to say it’s really a pleasure to participate in this event and see such a crowd of both Chinese and Swiss in the audience. This is excellent testimony to the growing exchanges and ties between the two countries I love. I’m really grateful and honoured to have this opportunity to speak at this gathering with so many experts and entrepreneurs in the healthcare industry.

Unlike some of the previous speakers, I am not a healthcare specialist. I have an engineering background and have spent the past few years with the Swiss Centers China. This is a non-profit organisation which has already supported more than 300 companies to set up and operate in China; many of them are Swiss technology companies. I have witnessed their successful business development in the challenging, dynamic, and very rewarding Chinese market. So it’s with this experience and perspective that I hope to share with you today on my topic: What China Has to Offer in the Health Care Industry to the Swiss Technology Companies.

So, let’s talk about China. We all know that China has experienced very fast economic growth in the past three decades, and as a result the social prosperity and people’s quality of life have significantly improved. In only 30 years, 600 million people were pulled out of poverty and life expectancy has increased by more than eight years to 76.3, according to data from 2015. As well, in the last decade, China has embarked on the biggest health system reform that the world has ever seen, with significant investment in expanding health infrastructure into rural areas and establishing universal health insurance.

Just to give you an example, at the beginning of this century, less than a third of the Chinese population had access to health insurance. But as of today, nearly 100% of Chinese  have basic health insurance, which creates a safety net. This alone is a very big achievement, especially in such a short time span. It is similar to much of the progress that China has made in the past at a very amazing speed and scale.

However, China’s healthcare system still faces many challenges. Some are similar to those of developed countries, like a fast-growing ageing population, and increasing rates of cancer and cardiovascular diseases that can be linked to lifestyle factors. Other issues are unique to China, for example the medical infrastructure is still highly concentrated, creating unequal access, and there is a growing tension between patients and doctors which sometimes creates a low-trust environment.

The Chinese government is addressing all these challenges. A year ago, in October 2016, the central government released its China Health Plan 2030 – the first time a medium to long-term strategic plan has been developed for the healthcare sector at the national level. Many of you may know that China, unlike Europe, has a very strong central government, with a top-down system. The country is actually run by five-year plans, and sometimes even 10 or 15-year plans in strategically important areas like healthcare. This is one of China’s advantages.  

I will quickly share a few examples with you. In the healthcare plan, China set targets for 2030: life expectancy should be improved from 76.3 years to 79 years, the infant mortality rate should be reduced from 8.1 to five per 1,000 births, the rate of premature death caused by major chronic diseases shall be reduced by 30%, and an RMB6 trillion healthcare industry should be developed. The actions in this plan are carefully structured, with five main tasks: 

  1. The healthy living forum, which is about public education on health and promoting a healthy lifestyle.  
  2. Optimise health services to ensure access to public health resources, improve treatment of chronic disease and medical care delivery, create more home-based family services, and develop traditional Chinese medicine.
  3. Improve health security by improving the medical insurance system and ensuring the security of the drug supply. 
  4. Build a healthy environment by preventing pollution, monitoring health, public health and the environment, and ensure food and drug safety.
  5. Develop a healthcare industry that includes the medical and the pharma industry, as well as service providers, including fitness, sports, tourism, digitalisation and internet-related business.

It’s worth noting here that in the plan it clearly states: “To further open up the medical sector to foreign investors”. Until now it has not been possible for a foreign investor to set up a 100% foreign-owned hospital, however today in the Shanghai Free-Trade Zone — where Swiss Centers has a facility — you already have special policies which allow 100% foreign-owned hospitals and clinics; this is an opportunity for service providers.

For Swiss looking at this plan, there are many business opportunities. Since Switzerland has an excellent healthcare system with renowned medical centres, hospitals, and clinics, China can learn many things from Switzerland. Swiss healthcare professionals can also contribute to and benefit from China’s evolving healthcare market. Since our topic today is focused on technology, I will try to share a few insights with my Chinese compatriots about  Swiss expertise in technology.

Besides its beautiful mountains and scenery, Switzerland is also a star in innovation and technology. It is constantly ranked as the most innovative country in the world. Even though it only has a population of 8.5 million people, Switzerland has the highest number of patents per capita, and one of the highest number of Nobel laureates per capita. By the way, congratulations to the latest winner of the Nobel in chemistry, Professor Jacques Dubochet, who is from Lausanne, where I happen to live. His invention involves cryo-electron microscopy in biochemistry, which also enables technology for life science and healthcare-related industries.

Switzerland also has excellent research institutions. They have 10 universities that are ranked among the top 500 in the Times Higher Education World University Rankings, and among them are two federal institutes of technology in Zurich and Lausanne ranked as best in Europe for science and technology. Thanks to its social stability, excellent quality of life and good business environment, Switzerland is one of the most competitive countries in attracting talents and producing an innovation-driven economy.

As we all know, Switzerland has a very strong pharma industry with big names such as Novartis and Roche in Basel. Some of our Chinese guests may not know that Switzerland has more than 1,700 medical technology companies. They produce a broad range of products, and have a broad range of technologies and competencies which can be applied in the healthcare industry. For example, many of them are producing top class implants, including the micro and nano-devices for medical procedures. Their roots evolved from the renowned Swiss watchmaking industry, and quality and precision are their key competencies.

In the Lake Geneva region, as well as Zurich and Basel, Switzerland has ambitious med tech and biotech sectors that include start-ups, multinationals, as well as research institutions, and it is the technology frontier for healthcare. For example, the EPFL Geneva Campus is leading the European flagship human brain project, which aims to understand how the human brain functions. There is also Nestlé, which has established the Institute for Future Health in Lausanne to study nutrition, as well as many start-ups.

Among the 2017 top 100 best Swiss start-ups, you can find 33 that are healthcare related. They range from drug development and neuro-rehabilitation to mobile and in-home devices for health monitoring and diagnosis. So I hope I can convince my Chinese compatriots that there are many hidden jewels and future champions in Switzerland in this sector which offer great technology and innovation.

Let’s look at how some of these technologies can help China and the world to tackle the future challenges of healthcare. I would like to summarise them into four big trends.

The first, as already mentioned by previous speakers, is that the future focus of healthcare will shift from treatment to prevention. You already heard a lot about this from Peter Ohnemus of Dacadoo, which has a great point system. I think it's a very innovative new ecosystem which will help in this domain.

I will not repeat the details of digitalisation in the front end, but will talk instead about some other potential technologies which may not come to mind when you think about healthcare. For example, there is a small ETH Zurich spin-off – one of their colleagues is also in the crowd today – called rqmicro. They have technology to develop rapid sample preparation and pathogen detection with a lab-on-a-chip solution which can monitor water and food security. For example, they can shorten the time needed to obtain test results for Legionella bacteria from more than 10 days to only one hour. For those who don’t know, Legionella is a bacteria found in water tanks and heating systems which can cause a serious outbreak of fatal Legionnaires' disease. This technology clearly provides a faster and cheaper solution that can be applied to detecting many other pathogens to ensure food and water security, which is essential for public health.

Another example in diagnostics is the EPFL spin-off Abionic, whose patented nano-fluidic technology provides a revolutionary biomedical screening platform that can test a single drop of blood in minutes for sepsis, allergies, and other diseases.

The next trend I would like to talk about is data-driven and personalised medical care. As you have already heard, big data is a catch phrase today, and it will definitely influence how healthcare evolves. We already know there are many mobile devices which track our habits and our lifestyle.

Let me to give you another example, DomoSafety, which is an EPFL start-up providing a smart system for seniors living at home. Just to give you a bit of context, China has a very large ageing population; it is estimated that the number of people above the age of 65 will rise to 230 million by 2030. This will be more than the number of 65-year-olds in the US and European Union combined. That’s a huge problem for China to face and to solve. DomoSafety may have a smart solution. What it does is to install simple sensors in a home, which can monitor the behaviour and lifestyle of the elderly 24 hours a day, without using cameras or microphones. They have a unique behaviour analysis technology which can eventually generate reports and automatically link their data to the caretakers and hospitals. This will enable emergency and preventive signals and messages, so that the doctors and caretakers can respond accordingly in an efficient and timely way.

For example, if a senior starts moving more on their left side, or gets up more frequently at night, this could be an early sign of reduced mobility or an increased risk of night falls.  Instead of waiting for something to happen, some preventive measures can be taken to improve life quality and to keep the elderly living independently at home. DomoSafety is also conducting clinical research with Swiss hospitals on using its devices for Alzheimer’s patients.

Doctors today lack objective tools that let them know exactly how their patients live  at home. They can only rely on what they hear from family members or the seniors themselves. DomoSafety’s solutions offer objective, detailed data on how patients live 24 hours a day. It’s not enough to know the stages of Alzheimer’s; you must also evaluate and improve your treatment.  

Among the best start-ups this year is Ava. They have a smart bracelet, for women, which measures several parameters that can help them plan precisely for pregnancy. Another EPFL start-up Xsensio has developed the next generation of lab-on-skin wearable devices. The device can read biochemical information on the surface of your skin to easily provide real-time information about health and wellness.

There are many other important new trends, drugs, treatments and therapies that I could discuss, but I would like to conclude with one last thing. Swiss technologies are also in very high demand in China, because of its need to upgrade manufacturing to provide better quality and efficiency. This has been happening in all fields of manufacturing, including pharma and medical devices.

In the healthcare sector, China is determined to upgrade to manufacturing that is greener, more efficient, and more automated. There are many examples of Swiss machine tool companies that have made great deals and have had big contracts with Chinese factories. The reason for this is very simple – Swiss quality is becoming essential when China wants to produce world class, high-end, sophisticated medical devices. Therefore I believe Swiss technology companies with advanced equipment in robotics and precision tools can also benefit from the growth in China’s healthcare sector.

I would like to close my talk by quoting what China’s President Deng Xiaoping said in 1978 after launching his Reform and Opening Up policy. He said, "Science and technology are top productivity forces". So to all of you in the audience, your expertise, your innovation, your technology and your products will be our top productivity force for facing the challenges in healthcare both in China and around the world. With this, I will conclude and I hope to have further exchanges with you and learn from you. Thank you.”