SHANGHAI (Reuters) – The investment banking arm of China Construction Bank (601939.SS: Quote, Profile, Research, Stock Buzz) (0939.HK: Quote, Profile, Research, Stock Buzz) plans to launch a 5 billion yuan ($731.3 million) fund to focus on investments in the country’s rapidly growing heathcare sector, state media reported on Tuesday.
Hong Kong-based CCB International is leading the fundraising but has not yet reached the initial target of 5 billion yuan, the online edition of the official Xinhua News Agency (www.xinhuanet.com) said.
Once launched, the fund would focus on investments in healthcare-related sectors including pharmacy, medical equipment manufacturing, medical institutions and services, Xinhua quoted CCB International’s chief executive, Hu Zhanghong, as saying.
The fund, to be called China Healthcare Investment Fund, would be the first domestic investment fund specialising in investments in China’s heathcare industry, Xinhua said.
“With China’s economic growth, healthcare investments have become a priority of the government,” Hu was quoted as saying.
“The fund will share and take advantage of the high potential and fast growth of China’s healthcare industry where profits are ample,” Hu said.
China’s economic boom has resulted in stark health inequity between its urban and rural populations, and health experts have urged the Chinese government to work harder at improving healthcare options for China’s rural population.
For example, of every 1,000 children, 64 in the countryside will not live beyond their fifth birthday, compared with 10 in the cities, according to an academic report published in The Lancet medical journal last month. (For details: [ID:nHKG291602])
Beijing is reforming its medical and pension system in an effort to bridge the gap between the poor and rich.
In response, many global private capital investors have invested large sums in Chinese medical firms in hopes of making hefty profits, and some of them, such as Mindray Medical International Ltd (MR.N: Quote, Profile, Research, Stock Buzz), have successfully listed or expanded abroad. ($1=6.837 Yuan)