After a decade of localization mandates, China has finally put pen to paper on what ‘local’ means. The Ministry of Finance’s draft Notice for Comments (dated 5 December 2024) sets out three criteria for a ‘local’ product — substantive in-China transformation, a minimum cost percentage of components produced in China, and in-country completion of key components/manufacturing steps for certain products.
While this marks progress towards a national definition of ‘local,’ the granular thresholds, definitions of ‘key components/manufacturing steps’ and enforcement mechanics remain unclear — and cross-agency coordination is still a work in progress. This leads to varied hospital-level interpretation.
Until clarity lands, multinational medtech leaders must scenario-plan footprints, engage regulators early and prepare for more stringent procurement requirements.
Learn more about how L.E.K. can help MNC medtechs navigate China’s localization strategy and translate it into actionable initiatives and competitive advantage by downloading our analysis.
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