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Chinese couples fuel booming reproductive health market

BEIJING — On a recent afternoon, a visitor from northern China took a smoking break outside the Beijing Perfect Family Hospital. Cigarettes were one reason why he visited the capital: He believes his nicotine habit has played a part in damaging his fertility.

Nurses holding a pair of fraternal twins to their mother after they were born at a hospital’s IVF centre in Xi’an, Shaanxi province. With China having relaxed its strict one-child policy, the assisted reproductive health market could potentially be worth around S$21 billion. Photo: Reuters

Nurses holding a pair of fraternal twins to their mother after they were born at a hospital’s IVF centre in Xi’an, Shaanxi province. With China having relaxed its strict one-child policy, the assisted reproductive health market could potentially be worth around S$21 billion. Photo: Reuters

BEIJING — On a recent afternoon, a visitor from northern China took a smoking break outside the Beijing Perfect Family Hospital. Cigarettes were one reason why he visited the capital: He believes his nicotine habit has played a part in damaging his fertility.

The 38-year-old construction businessman, who asked to be identified by his last name Zhang, worked hard to build a business with his wife, who is 35. But when they were finally ready to have kids, it was a struggle.

The Zhangs became one more couple among millions of Chinese to turn to an assisted reproductive-health market potentially worth around US$15 billion (S$21 billion).

A paradox has emerged in China: As the country finally relaxes its one-child policy, factors like lower sperm counts, later pregnancies and other health barriers are making it harder for many to get pregnant.

As a result, businesses from China to Australia, and even California, are lining up to help — and profit from — the growing market of prospective parents.

Families in the world’s most populous country are willing to pay top dollar for fertility therapies. Mr Zhang said his package for IVF (in vitro fertilisation) was 100,000 yuan (S$20,300) for each round.

“Now that our economic conditions are better, we all want children but it’s hard for a lot of us,” he said, puffing on his second cigarette. “All the years of smoking and drinking and business dinners take a toll. It’s difficult for me and my wife to conceive naturally and we needed help.”

For decades, couples in urban China were only allowed to have one child, but the country, which is trying to boost its shrinking workforce, now allows two.

China’s market for IVF alone was worth US$670 million (S$923 million) last year and is expected to surge to US$1.5 billion in 2022, according to BIS Research.

Assuming that 65 per cent of infertile couples choose to seek treatment, the total assisted reproductive health market could one day be worth about 107 billion yuan using an average cost of as much as 40,000 yuan, brokerage firm Hua Chuang Securities Co estimates.

Sperm counts (measured by the number of sperm per millilitre) dropped very significantly from 100 million in the early 1970s to as low as 20 million in 2012 in China, according to Mr Yanzhong Huang, senior fellow for global health at the Council on Foreign Relations.

The higher stress levels accompanying economic development, pollution, late marriage and late childbirth, smoking and alcohol use could be contributing factors, he believes.

A 2015 study in central China showed that only about 18 per cent of those tested had semen healthy enough for them to be sperm donors.

In 2001 the figure was 56 per cent according the study, which was published this year in the medical journal Fertility & Sterility.

Many Chinese women, meanwhile, are choosing to have children later as they pursue their careers.

Yet the desire to have biological children looms large which is driving demand for services like IVF.

Virtus Health Ltd, an Australian company that offers fertility treatments, receives regular approaches from Chinese firms looking for partnerships.

But getting a local licence is difficult so Virtus works with medical tourism agencies in China that help patients get to its Australian and Singapore clinics.

It has Chinese-speaking fertility specialists, scientists and nurses and its websites are translated into Chinese, according to the firm’s chief executive officer Sue Channon.

Thousands of miles away, Mr Mark Surrey, co-founder and medical director of the Southern California Reproductive Center in Beverly Hills, says about 20 per cent of its patients came from China over the past year.

“There are increasing numbers of people in China who have the socio-economic means to choose what kind of reproductive technology that they would like,” Mr Surrey said. Among other services, the centre’s California-based clinics offer tests to learn the gender of the embryo. These can be particularly attractive to patients from mainland China, where gender selection is banned.

At home, China’s “public facilities are currently quite overburdened, which significantly impacts the patient experience,” said Ms Roberta Lipson, chief executive officer at United Family Healthcare, which is partly owned by China’s Shanghai Fosun Pharmaceutical Group.

Her company has been conducting IVF and fertility services in the northern city of Tianjin for over two years, with clinical expertise from around China, as well as from the United Kingdom and Australia.

“We hope to get licensed in our other cities throughout China to provide a more convenient option for private patients,” Ms Lipson said.

Still, Chinese patients face a number of regulatory hurdles at home. Single women, for instance, aren’t allowed to freeze their eggs in the country and such restrictions have many patients considering trips abroad.

“Regulations make it difficult to enter the market,” said Mr Masoud Afnan, director of fertility services and general manager of Tianjin United Family Hospital.

Clinics “need a full IVF clinic, with the required number of staff, to do IUI for two years. This is an expensive option to just do IUI,” said Mr Afnan, referring to intrauterine insemination, a fertility treatment that places sperm directly into the uterus.

As of last year, the country had 451 sperm banks and medical institutions licensed to provide reproductive care, the National Health and Family Planning Commission estimates. But that’s outpaced by demand in a country of 1.4 billion people.

“Assisted reproduction has become one of the fastest-growing, high-potential fields in China’s medical market,” analysts with Haitong Securities wrote in a January report.

Overseas hospital operators like IHH Healthcare Bhd, which is listed in Malaysia and Singapore, Thailand’s Bumrungrad Hospital PCL and Bangkok Dusit Medical Services PCL are among those likely to benefit from a rise in Chinese patients, according to Ms Laura Nelson Carney, an analyst with Sanford C Bernstein.

Businessman Zhang, standing in downtown Beijing, knows many others with similar troubles. “Our friends can talk about it openly,” he said. “Many of them used IVF too.”

The process requires multiple visits to Beijing: They visited in November for the extraction of eggs and sperm, and again in March for preparations. Still, he will likely consider having two children — if the first attempt doesn’t result in twins. BLOOMBERG

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