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March, 2004 It was Communist Party boss Deng Xiaoping who transformed China from Stalinism, chaos and famine into a global industrial power. These days, it is his son, Deng Pufang, who embodies a new front of social change - one that also drives Wisconsin exports. The younger Deng, who uses a wheelchair, is among the nation's most vocal advocates for healthcare reform. As China rapidly gains affluence, it spends a growing share of its newfound wealth on medical equipment and biotechnology, important elements of Wisconsin's economy. Exports of medical equipment to China increased 60% in 2003 to $155.5 million, making it Wisconsin's single-biggest export business to the mainland, state figures show. Deng met Gov. Jim Doyle last week as the Wisconsin politician led a trade promotion tour of China. Deng's message was that China still has far to go. Of the 60 million Chinese with disabilities, which is about 5% of the population, "many still live in poverty," the 60-year-old Deng told Doyle when they met in Deng's Beijing offices at the China Disabled Persons Federation. At many of the stops of the 12-day mission, which ended this week, Doyle and his 80 business delegates encountered an urgency to modernize thousands of antiquated hospitals and hasten the nation's transition to a market-based public health system from a dysfunctional Mao-era model. The embrace of Western medical technology marks no small change in an ancient Eastern civilization that has prided itself for millenniums on treating the sick with herbal remedies, natural therapies, acupuncture and a form of massage called reflexology. But like so much else in China, the old coexists with the new, searing poverty coexists with hip, young urbanites, and change comes with whiplash speed. "You feel like a giant human experiment is going on," said Robert A. Kapp, president of the US-China Business Council, as he addressed Doyle's delegation in Beijing. "Every mayor and every governor wants the latest and greatest hospital for their people," said Steven Schneider, chairman and chief executive of General Electric (China) Co. Ltd. Waukesha-based GE Medical Systems, a leading maker of diagnostic imaging equipment, ranks as one of the biggest beneficiaries of China's medical-spending binge. GE Medical, which is changing its name to GE Healthcare, is a success story in China. The group, a division of General Electric Co., had $700 million in sales in China in 2003 and expects double-digit increases for years to come, Schneider said. Adding GE Medical jobs in China also means adding jobs back home in Wisconsin, company officials say. The three GE Medical factories in China import as much as 75% of their advanced components from the United States, and most of those come from Wisconsin, said Michael Idelchick, president of GE's China technology research center in Shanghai. GE Medical plans to add 600 jobs and an $85 million office complex near Milwaukee and also is expanding in China, where it employs 2,200 and operates three factories. Last year, GE opened the $26 million Medical Systems industrial park on the fringes of Beijing and the massive Shanghai research and development facility, which is one of four in GE's global business empire. GE Medical said that just more than half of its $10.2 billion in 2003 sales derive from U.S. hospitals, with the rest split roughly between Europe and Asia. To be sure, GE's happy-ending China ventures remain an anomaly. The U.S. trade deficit with China has widened to record levels as a rising tide of made-in-China goods flood U.S. stores and decimate American rivals that cannot match low production costs. GE made a prescient decision to enter China early. It sold its first CT scanner in China in 1979, right after Deng Xiaoping launched the reforms that opened China to foreign investment and market economics. In 1991, it launched its first joint venture. Several smaller medical technology firms are trying to get their foothold. Dai Shin Technologies Inc. in Waukesha is betting that China needs its blood-oxygen diagnostic equipment just as much as the birthing rooms and ambulances in the U.S. do. An anesthesiologist in Nanjing cited the Chinese zodiac in explaining her interest in the firm's fetal diagnostic sensors, said Dai Shin representative Danica Olson. "She said that this is the year of the monkey, and that's when the most babies are born in China." Olsen said she began negotiations with her and other potential clients. Last year's outbreak of SARS, or severe acute respiratory syndrome, exposed deficiencies in the nation's health care system and fueled demand for diagnostic equipment, said GE's Schneider. Recent cases in southern China of avian influenza, or bird flu, only has sustained the urgency. SARS "opened up a lot of eyes," Schneider said during a tour of the brightly lighted, ultramodern GE facility on the outskirts of Beijing where Chinese workers finish assembly of digital-imaging equipment. EraGen Biosciences Inc., a Madison-based biotech group, joined the governor's mission to find new buyers for its diagnostic tests for SARS, said Irene Hrusovsky, president and chief executive of EraGen. "Medical needs such as SARS detection and now bird flu require rapid detection systems," Hrusovsky said. Some seasoned foreign travelers say they would rather fly home to be treated than be treated in a Chinese hospital. Health insurance remains a rare luxury for most Chinese, most of whom pay for medical care from savings, according to the World Bank. "Public health in rural China has fallen by the wayside," said Kapp, of the business council. "There are 66,000 hospitals in China, and 16,000 of them have over 50 beds, and many of those have no medical equipment or only the most rudimentary medical equipment," Doyle said, citing figures from Chinese officials. Shanghai, arguably China's most modern and international city, has four emergency phone numbers that serve the same function as the single 911 number in the U.S., said Mark Anderson, president of the Center for International Health in Wauwatosa. Anderson, one of the delegates on Doyle's mission, signed an agreement in Shanghai to upgrade the city's emergency response medical systems. Creating a single, 911-like emergency responder phone line is one of the first orders of business for the center, which is a consortium of Froedtert Memorial Lutheran Hospital, the Medical College of Wisconsin, Children's Hospital of Wisconsin, Marquette University and the University of Wisconsin-Milwaukee. Anderson said the arrangement can create more demand for Wisconsin-made medical equipment as the non-profit center consults with Shanghai's hospital administrators and physicians on their needs for supplies. GE Medical is the world's leading producer of medical imaging equipment and diagnostic technology. Its technology can scan an entire head, producing sharp three-dimensional images in a matter of minutes, a process that took hours only a decade ago. But in China, demand is strongest for the most basic equipment, said Schneider, a 19-year GE veteran. Chinese hospitals want magnetic resonance imaging equipment that costs $400,000 to $700,000, while U.S. hospitals buy advanced machines with a $2.5 million price tag. "Compared to what we make in the U.S., this is low end," Schneider said. But in China, "this is what the market needs right now." |
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