China is encouraging local R&D and local manufacturing, particularly on what they call high-value medical equipment, which is particularly large medical equipment like X-ray machines and the like. They’re focusing on that because of money in part, and in part because they want to localize all healthcare business—meaning drugs, devices—because that’s part of their long-term goal.

To be sold in China, all medical devices entering the Chinese market are required to obtain pre-market approval from the Chinese State Food and Drug Administration (SFDA). This approval is known as “medical device registration.

In order to effectively supervise and manage the medical device market, the SFDA classifies various medical devices into three classes (i.e., Class I, Class II and Class III).

Class I Medical Devices are those for which safety and effectiveness can be ensured through routine administration; Class II Medical Devices are those for which further control is required to ensure their safety and effectiveness; Class III Medical Devices are those which are implanted into the human body, or used for life support or sustenance, or pose potential risk to the human body and thus must be strictly controlled in respect to safety and effectiveness.