IE Singapore taps vocational education and healthcare opportunities in China

The body eyes capitalising on China’s growing demand for skilled manpower and quality healthcare services via business missions.

As part of ongoing efforts to help Singapore companies better understand China and tap on business opportunities created by current market trends, International Enterprise (IE) Singapore is leading two business missions to China.

IE Singapore observes two major trends:

a. First, more MNCs and companies are shifting inland to western and central China. The rapid economic development, including growth of new industries in the inland provinces, has seen rising demand for skilled manpower.

b. Second, the Central Government released a circular last November, indicating moves to liberalise the healthcare sector.

In line with the above, IE Singapore is taking eight Singapore vocational and technical education (VTE) companies and academic institutions to Kunming (Yunnan province), Wuhan (Hubei province) and Chengdu (Sichuan province), on a five-day mission from 8 to 13 May 2011. The companies will meet the education departments of these cities and visit some local VTE institutions, according to an IE Singapore report.

The second mission comprises 13 Singapore healthcare providers to Beijing, Jinan and Qingdao (Shandong province) on a six-day mission from 8 to 14 May 2011. They will meet the Health Bureaus to better understand the progress of healthcare reforms in the respective cities and Chinese conglomerates seeking Singapore-based partners.

Commenting on the vast opportunities in China, Mr Tan Soon Kim, IE Singapore’s Group Director of Lifestyle Business Services said, “Singapore’s VTE and healthcare companies have developed critical expertise and high standards from serving the domestic market in Singapore. These companies have successfully extended their services overseas and gained considerable insights from operating in different environments. Our VTE companies can customise industry-relevant programmes, whilst the healthcare companies can provide a full suite of services from clinical care, to healthcare IT solutions and training programmes. These capabilities represent a good fit for the needs of the Chinese market, and we are confident our companies can partner their Chinese counterparts in lifting the skill sets for industry developments and enhancing their healthcare coverage.”

VTE – An emerging industry in inland China
China’s rapid growth has resulted in an exponential rise for demand of skilled labour. However, graduating Chinese job-seekers find the skills learnt in school are falling short of employers’ expectations. To close the capability gap and raise their chances of securing jobs, many are turning to market-attuned skills development courses.

China’s total annual spend on education is projected to reach RMB4.1 billion (S$774 million) by 2013. Of this amount, 78% is expected to be spent on private education. Indeed, as at 2008, over 20% of the students enrolled in private educational institutions pursued courses in vocational and technical training. This demand translates into a market valued at over RMB 630 million (S$119 million) for VTE providers.

IE Singapore encourages Singapore’s VTE players to look at opportunities in central and western China. Driven by rising business costs on the coast, MNCs such as Foxconn and Dell are moving inland. As investments move to western and central China, new industries will emerge, diversifying the existing economic structure in these cities. This calls for skilled manpower. Currently, Singapore VTE companies such as NTUC LearningHub, Service Quality Centre and Nanyang Polytechnic have secured training projects in Chongqing, Sichuan, Shaanxi, Hubei, etc.

Liberalisation of China’s healthcare sector
According to the Chinese Central Government, foreign companies will be allowed to wholly own healthcare facilities such as hospitals and clinics without having to partner Chinese companies. This was shared in an official circular released last November to further liberalise the healthcare sector.

The development bodes well for Singapore’s healthcare providers as the healthcare sector in China has traditionally been tightly regulated, with public healthcare dominating 90% of the market. IE Singapore also observes more Chinese conglomerates diversifying into the healthcare sector. These conglomerates are mostly new to healthcare and are seeking experienced partners. For example, Founder Group – an established player in the Chinese IT industry – has expanded into the healthcare sector. With help from experienced healthcare players, the company set up a medical management company and is involved in establishing large-scale hospitals in China. Singapore companies can explore partnerships with these conglomerates and benefit from their strong local networks to further expand in China.

In 2010, healthcare represented 4.5% of China’s GDP. The country’s total healthcare spending is projected to reach US$480 billion (S$588 billion) by 2018. In 2008, about 7% of the total healthcare spending came from Shandong, placing the province in fourth place for healthcare spending, after Guangdong, Zhejiang and Jiangsu provinces. Beijing ranked fifth, accounted for 6% of the total spending.

Currently, Singapore healthcare players such as Q&M Dental Group, Healthway Medical Group, Raffles Medical Group, T32 Dental and Parkway Holdings have established healthcare facilities in China.