If your category is in VBP
Volume is real but margin is thin. The model rewards scale, cost discipline and often local manufacturing. Premium positioning alone will not hold.
Plan: cost base, or a differentiated tierChina is still the world's second-largest healthcare market and the one no medtech or pharma board can ignore. But the story of the last few years is diversification, not exit. The question is no longer whether to be in China — it is how to enter so that a single market, a single agent or a single procurement round cannot decide your fate.
China regulates medical products through the NMPA under the 2021 Medical Device Supervision and Administration Regulations. A foreign manufacturer cannot register alone: you must appoint a China-based legal agent, and in practice also an after-sales service provider and a distributor. Registration is only the entry ticket. The force that actually shapes your economics is volume-based procurement (VBP) — the national tendering system that has cut prices 60–90% across drug and device categories and reached its 11th pharma round in 2025. China remains unavoidable for its scale and ageing population, but the sound strategy today is a deliberate one: enter for the opportunity, structure for the concentration risk, and keep Southeast Asia as the hedge.
The mistake with China is treating it as a binary — all in, or stay out. The market rewards a third posture: present, but not over-concentrated.
China is too large to write off. It is the second-largest medtech and pharmaceutical market in the world, its population is ageing faster than almost any other, and domestic demand for advanced diagnostics, implants and biologics keeps rising. For most German life-sciences companies with global ambition, some China presence is a matter of when and how, not if.
What has changed is the risk calculus. Concentration risk, intellectual-property exposure, localisation pressure and the price compression of national procurement have made "China as your single growth engine" a fragile bet. The companies doing this well in 2026 treat China as one large market inside a portfolio — entered on purpose, sized deliberately, and balanced by at least one other corridor.
China is not a question of courage. It is a question of structure.
Every serious China decision weighs the same two columns. Write them down before you model a single revenue line.
Neither column cancels the other. The work is to enter the left-hand column while structurally limiting the right — which is exactly why we pair every China conversation with the diversification logic in Southeast Asia.
China's registration path is document-heavy and, for higher-risk products, requires testing and clinical evidence inside China. The order matters — and so does who is standing in for you at each step.
China uses three risk classes (I, II, III). Class II and III drive the heavy pathway; your EU classification is a guide, not a ruling — the Chinese rules govern.
A China-based legal agent is mandatory for any foreign manufacturer. It is the applicant-side channel to the NMPA before and after approval.Not waivable
Class II and III devices generally require type testing by an NMPA-recognised Chinese test centre — often the longest single item on the calendar.
Many Class III (and some Class II) devices need clinical evaluation; some require a clinical trial conducted in China. An equivalence route, clarified in 2025, can reduce this for eligible products.2025 reform
Submit the registration dossier. Plan in years, not months, for imported Class III — testing, clinical work and review stack up.
An after-sales service provider is required; a distributor is near-universal. Only now do you meet the market — and VBP.
As on every corridor, the party who holds your regulatory identity is the decision that is cheap to make and expensive to unwind.
China does not let a foreign manufacturer register on its own. You appoint a China-based legal agent that communicates with the NMPA, manages the certificate, and handles post-market surveillance, registration renewals, recalls and adverse-event reporting. Separately, an after-sales service provider is required, and in almost all cases a distributor moves the product.
The temptation — identical to Brazil and Southeast Asia — is to let one Chinese partner be all three: agent, service provider and distributor rolled into one. It is convenient, and it quietly hands a single company control of your certificate, your service reputation and your route to market at once.
When your legal agent is also your distributor, changing commercial partners can mean losing or re-filing your registration. The leverage sits with them, not you — and NMPA re-registration is measured in years.
The deliberate alternative is to separate the roles: an independent regulatory agent (or your own Chinese entity) holds the registration, and distribution is contracted apart from it. It costs more and it keeps the market yours — the same structural rule we set out for the Brazilian Registration Holder.
Volume-based procurement is the single most important commercial fact about China — and the one most foreign entrants underweight until it lands on their product.
Run by the National Healthcare Security Administration (NHSA), VBP is a centralised tendering system: the state aggregates public-hospital demand into huge volume commitments and awards them to the lowest compliant bidders. In exchange for guaranteed volume, manufacturers accept steep price cuts. Across five years and multiple rounds it has driven prices down 60–90% in categories from coronary stents and orthopaedic implants to infusion sets, and in wave after wave of pharmaceuticals.
The rhythm is now routine: the 11th national round of drug VBP arrived in 2025, covering dozens of molecules; a further round of device and consumable procurement sits in the NHSA's 2025 plan. Notably, the 2025 pharma round came with deliberate "goodwill" adjustments after industry pushback — a sign the system is being tuned, not retired.
Volume is real but margin is thin. The model rewards scale, cost discipline and often local manufacturing. Premium positioning alone will not hold.
Plan: cost base, or a differentiated tierNewer, differentiated or highly specialised products may sit outside VBP for now. Treat that as a window, not a permanence: assume your category could be tendered next.
Plan: revenue before the round reaches youIn China you can be approved, listed and still unprofitable — because the price was set by a tender, not by you.
This is the China face of the thesis we carry across every market: authorisation and reimbursement are not the same event. We set it out in full in authorized isn't paid.
China's registration timeline and price environment make sequencing a strategic choice, not an afterthought.
Whichever you choose, decide it explicitly and against the other corridors, not in isolation. That comparison is the whole point of our emerging-market decision guide.
Start with a fixed, written deliverable for the China corridor, then plan execution in a working session — especially the agent structure and your exposure to VBP.
A one-off written roadmap for China — the classification, the registration sequence, and an honest read on your VBP exposure before you commit.
A focused session to separate the agent, service and distribution roles, weigh China against a second corridor, and plan the first year.