Sam Radwan, CEO of ENHANCE International, recently joined Bloomberg TV to discuss how China’s reopening could affect consumer spending, with a particular focus on medical expenditure and medical tourism.

Sam highlighted the strong relationship between medical literacy and medical expenditure in China. Medical literacy broadly reflects an individual’s awareness of their health risks, preventive care opportunities, and healthcare needs.

According to ENHANCE’s research, the correlation between medical literacy and medical expenditure in China is approximately 0.9. Over the past 15 years, medical literacy in China has increased by slightly less than 2% annually. Following the outbreak of COVID-19, however, the increase accelerated to approximately 6% in 2020.

Sam believes the pandemic significantly increased public awareness of health and preventive care. As China reopens, this heightened awareness could continue to support medical expenditure. Medical expenditure currently accounts for slightly under 9% of Chinese household spending, excluding medical tourism.

Sam also highlighted significant pent-up demand for medical tourism among Chinese consumers.

As international travel resumes, previously deferred demand for medical tourism could be released relatively quickly. According to ENHANCE’s assessment, this demand may not recover gradually, but could instead peak around the summer of 2023, followed by some moderation in the fourth quarter.

Demand for newer vaccines, concerns surrounding Long COVID, and worries about reinfection may further drive related medical demand.

However, the pace of recovery will ultimately depend on the reopening of international flights and the extent to which the countries and destinations that consumers are interested in visiting reopen.

For the healthcare industry, China’s reopening represents not only a recovery in consumer activity, but also the gradual release of previously pent-up medical demand.

Watch the full video at the link below: https://youtu.be/qcCFUVknJrA?si=83HC5nMuSkIaRLhW