(Yicai Global) Oct. 13 -- Medical equipment manufacturers are vying for added sales as Chinese hospitals are encouraged to upgrade their technologies through discounted loans.

As of Oct. 11, the total of discounted loans implemented by provinces and municipalities for medical device upgrades reached about CNY19.2 billion (USD2.7 billion), Kaiyuan Securities wrote in a research report. The policy applies to diagnostics and treatment, clinical testing, intensive care, and rehabilitation.

Medical device suppliers are embracing the new policy as Siemens has recently launched a variety of solutions including imaging and lab diagnostics, as well as clinical treatment on its WeChat account for hospital customers.

Domestic rivals Wondfo Biotech, MGI Tech, Kangrun Biotech, and Homa Biological Engineering have also revealed on their WeChat that they intend to actively make use of the policy. 

Hospitals can apply for loan discount subsidies for medical equipment upgrades with a two-year discount of 2.5 percentage points from the central government, based on a decision of an executive meeting of the State Council in early September as part of a economic stimulus package to encourage more spending in the nation’s service sector.

The application period lasts till Dec. 31. Besides healthcare, several other sectors such as the fields of new infrastructure projects involving fifth-generation wireless communications, artificial intelligence, and electric vehicle charging piles can also apply for the discounts. 

The policy is expected to benefit high-end equipment suppliers in computerized tomography, magnetic resonance imaging, endoscopy, Doppler ultrasound, and biochemical testing, as well as emergency and life support equipment suppliers related to Covid-19 treatment, Hu Hong, secretary of the board of directors of Wondfo, which makes diagnostic testing products such as Covid-19 tests.

The degree of benefits should vary from manufacturer to manufacturer, said Su Xing from United Imaging, a Shanghai-based supplier of imaging equipment. But hospitals may finally complete some large purchases that were delayed during the Covid-19 pandemic, Su said.

However, the impact of the policy remains to be seen as hospitals will still need to repay the loans, Hu said. Clinics have been facing revenue pressures in the past two years because of the pandemic, so they have to be cautious when making procurement decisions, the Wondfo board member added.

Editor: Emmi Laine, Xiao Yi