PALGRAVE STUDIES OF INTERNATIONALIZATION IN EMERGING MARKETS The Globalization of China’s Health Industry Industrial Policies, International Networks and Company Choices Marco R. Di Tommaso · Francesca Spigarelli Elisa Barbieri · Lauretta Rubini Palgrave Studies of Internationalization in Emerging Markets Series Editors Marin A. Marinov Aalborg University Aalborg, Denmark Svetla T. Marinova Aalborg University Aalborg, Denmark Emerging market nations such as Russia, Brazil, China, South Africa and India as well as Eastern European territories, are in the process of changes and growth that require specific study and attention. The international business strategies employed in these territories target new opportunities, the study of which provides scholars the opportunity to evolve interna- tional business theory. 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For details on the book proposal process please visit our website: https://www.pal- grave.com/gp/book-authors/publishing-guidelines/submit-a-proposal More information about this series at http://www.palgrave.com/gp/series/15456 Marco R. Di Tommaso Francesca Spigarelli Elisa Barbieri • Lauretta Rubini The Globalization of China’s Health Industry Industrial Policies, International Networks and Company Choices Marco R. Di Tommaso Francesca Spigarelli Department of Economics and Management Department of Law University of Ferrara University of Macerata Ferrara, Italy Macerata, Italy Elisa Barbieri Lauretta Rubini Department of Economics Department of Economics and Management Ca’ Foscari University of Venice University of Ferrara Venice, Italy Ferrara, Italy ISSN 2662-1185 ISSN 2662-1193 (electronic) Palgrave Studies of Internationalization in Emerging Markets ISBN 978-3-030-46670-1 ISBN 978-3-030-46671-8 (eBook) https://doi.org/10.1007/978-3-030-46671-8 © The Editor(s) (if applicable) and The Author(s), under exclusive licence to Springer Nature Switzerland AG 2020 This work is subject to copyright. All rights are solely and exclusively licensed by the Publisher, whether the whole or part of the material is concerned, specifically the rights of translation, reprinting, reuse of illustrations, recitation, broadcasting, reproduction on microfilms or in any other physical way, and transmission or information storage and retrieval, electronic adaptation, computer software, or by similar or dissimilar methodology now known or hereafter developed. The use of general descriptive names, registered names, trademarks, service marks, etc. in this publication does not imply, even in the absence of a specific statement, that such names are exempt from the relevant protective laws and regulations and therefore free for general use. The publisher, the authors and the editors are safe to assume that the advice and information in this book are believed to be true and accurate at the date of publication. Neither the publisher nor the authors or the editors give a warranty, expressed or implied, with respect to the material contained herein or for any errors or omissions that may have been made. The publisher remains neutral with regard to jurisdictional claims in published maps and institutional affiliations. Cover illustration: ScientificDesign / Alamy Stock Vector This Palgrave Macmillan imprint is published by the registered company Springer Nature Switzerland AG. The registered company address is: Gewerbestrasse 11, 6330 Cham, Switzerland Preface At the time of writing of this book the world has been devoting an unprecedented amount of attention to the Chinese healthcare system. Since the very beginning of 2020, the rapid spread of the Covid-19 virus in China has immediately attracted the attention of international media and public opinion. Observing the events in China, the World Health Organization has decided to declare it a global emergency. And then, week after week, it has gradually become clear to everybody that what began in China would have spread all around the world. A very local Chinese health emergency has rapidly become a global emergency, chal- lenging our international economic and political equilibria. The new virus has gained immediate concern for its novelty, for its high rate of infectiousness and for the lack of appropriate preventive care (such as vaccines). In the attempt of China and other countries to curb contagion, policy measures have had impacts on people’s movements within and across countries and on their daily activities, including work. This is in turn has had huge impacts on economies and will likely have more in the future. To this matter the International Monetary Fund immediately cut its growth prospects and many other relevant institu- tions—World Bank, the World Economic Forum, the Organization for Economic Cooperation and Development, Deutsche Bank, Morgan Stanley, Moody’s, just to mention a few influential ones—have shared very similar views. Several manufacturing companies have stopped v vi Preface production and financial markets have everywhere been signalling eco- nomic difficulties and very negative expectations. Some specific filières— like tourism, entertainment, airlines, luxury goods makers and retail—have been the first and hardest hit at the beginning of the crisis. Coronavirus has started to disrupt the global supply chains with some industries—tech companies, apparel makers and industrial equipment manufacturers—showing to be the most vulnerable. On the one side, one local infection originated in the city of Wuhan became a dramatic health emergency for China and for the rest of our interconnected planet. On the other side, the social, political and eco- nomic impacts of this health crisis moved very quickly from Wuhan, to China and finally to our entire globalized world. The vulnerability of the local Chinese healthcare system has, rapidly and dramatically, become a threat for China and for our global socio-economic order. The global coronavirus crisis has reinforced one of the main ideas we present in this book: that the “production of health” is everywhere a vital strategic “industry” for our contemporary complex, fragile and intercon- nected societies. In general, as we shall see in Chap. 1, countries need an effective and efficient health industry for several reasons. To begin with, an effective and efficient health industry is needed because of the com- plex relationship that exists between growth and health. But this is only one of the reasons that make the health industry strategic, and it is not even the most important one. In fact, as we argue with more detail in the chapter, an efficient and effective health industry plays a central role in the sustainability of (economic and social) structural change, paving the way for progress in human development. Moreover, such sustainability is also reflected in the political consensus that is normally built around the capability of achieving “desired” levels of health by the population. The ability to guarantee such levels of health and to guarantee safety for a population of citizens is a crucial tool to build trust and consensus. And again, the recent epidemic cases confirm that the need to focus more on the study of how public health crises shape public trust, challenging the economy and societal governance. Finally, the provision of “health” opens up immense technological and prosperity opportunities, connected, for instance, to digitalization and Big Data collection and analytics, that can Preface vii trigger major structural changes of the economy as well as in people’s everyday lives. In this scenario, the centrality of the health industry appears particu- larly evident in the Chinese case because of, at least, two main sets of motivations: (a) the relevance of the healthcare challenge in contempo- rary political and institutional equilibria in China; (b) China’s unique weight in globalized world, both from an economic and geopolitical perspective For the two above-mentioned aspects—the centrality of the health industry and the very special implications of the Chinese case—in our book we focus on how this industry in China is growing, innovating and becoming global (Chap. 2). We devote special attention to the main areas in which this path of change takes place: government policies (Chap. 3), international flows of investments (Chap. 4) and research and innovation (Chap. 5). This book focuses on the experience of the Chinese health industry, which is seen as a very sophisticated knowledge-intensive filière, ani- mated by a plurality of interconnected networks of public and private actors: service providers, large manufacturers, small and medium-sized enterprises (SMEs), hospitals, clinics, laboratories, research centres, uni- versities, financiers, investors. The producers of health goods, services and knowledge are populated by communities of doctors, paramedics, ana- lysts, managers, entrepreneurs, white- and blue-collar workers, employ- ees, technicians, bureaucrats, government officials and directors, researchers and academics. A very complex community of people and institutions, with their goals, incentives, knowledge and practices need- ing guidance and coordination. In other (final) words, the future of China’s health industry is about pushing even more the massive public, private and collective investment in people and infrastructure, in organization and technology, in advanced knowledge, education and research. Such a great national plan demands a capacity of coordination of a plurality of actors and long-term strate- gies. Also in China the production of health continues to need appropri- ate strategic industrial policies, as currently occurs in many other sectors and in many other countries. We refer to policies not only aimed at the viii Preface promotion of the sector’s efficiency or innovation capacity, but visionary interventions driven by wide and ambitious societal goals. The success of China in this strategic industry will be a success for the entire world. Ferrara, Italy Marco R. Di Tommaso Macerata, Italy Francesca Spigarelli Venice, Italy Elisa Barbieri Ferrara, Italy Lauretta Rubini Acknowledgements There are many people we would like to thank, who have offered impor- tant contributions to our research projects on China, the health sector and the international industry and thus to the writing of this book. Before thanking them, we wish to underline that the ideas and opinions expressed in this publication are entirely those of the authors and do not necessarily reflect the views of the people who have worked with us in China or elsewhere. We would like to sincerely thank all the friends, colleagues and students in China with whom we had the chance to work. First of all, the colleagues of the South China University of Technology (Guangzhou) with whom we have built a long-lasting and fruitful partnership. Here our gratitude goes in particular to the leading Chinese economist Prof. Hailin Lan, for having shared with us his knowledge on business studies, China and Guangdong province; Prof. Manli Huang for being a reliable and highly prepared research partner and a true friend; Prof. Zhihe Long for the long- lasting friendship and for sharing with us his views on many occasions. We are also very grateful to Prof. Yue Qi of the South China Normal University and to Prof. Shenglei Pi of the Guangzhou University with whom we had the chance to collaborate and share important moments in these recent years. We are grateful to Prof. Ping Lv from the University of Chinese Academy of Social Science, with whom we have been developing analyses and sharing ideas for our research activity. We are deeply indebted to Mr. ix