DeltaHealth Hospital Shanghai has received approval from the Shanghai Municipal Health Commission to operate as a wholly foreign-owned hospital, making it the first of its kind in China to specialize in cardiovascular diseases.

The wholly foreign-owned hospital is Shanghai's first to be established since the country launched a pilot program in September allowing foreign entities to set up hospitals independently in Beijing, Shanghai, Guangzhou and Shenzhen in Guangdong province, and five other cities or regions.

The hospital, which began as a joint venture in 2016 and is located in Qingpu district, focuses on cardiology. It specializes in cardiovascular medicine, cardiovascular surgery, medical imaging and interventional therapy, thoracic surgery and oncology, and has been designated as a high-level social medical institution.

Swire Pacific, a Hong Kong-based international conglomerate, announced in May that it had completed a shareholding increase in DeltaHealth China. It marked the first time the group had taken a majority stake in a company in the healthcare sector.

Though Hong Kong is a part of China, and operates under the nation's "one country, two systems "policy, investments from the special administrative region on the mainland are considered to be of a foreign nature.

In September, the Ministry of Commerce and two other national-level authorities announced a pilot program to encourage more foreign investment in the healthcare sector, with nine cities and regions selected to test wholly foreign-owned hospitals.

Experts said the move signals China's commitment to further opening up its market in key sectors related to public welfare. They expect the initiative to attract foreign investment, promote high-quality development in medical services, and better meet the growing demand for personalized healthcare among both local and expatriate residents.

In January, Shanghai announced plans to encourage wholly foreign-owned hospitals in key economic zones, biopharmaceutical industry clusters and downtown districts with high concentrations of expatriates. Each of these areas can host up to two foreign-owned hospitals. The key economic zones include the free trade zone, the Lingang Special Area, the Hongqiao business district and the eastern hub international business cooperation zone.

The initiative allows such hospitals to hire expatriate physicians and healthcare professionals from Hong Kong, Macao and Taiwan. It also stipulates that at least half of the hospital's management and medical staff must be from the Chinese mainland.

"These wholly foreign-owned hospitals are expected to introduce state-of-the-art medical technologies, equipment and service concepts at an international level, diversify service offerings and contribute to the upgrading of the medical industry," said Jin Chunlin, director of the Shanghai Institute of Medical Science and Technology Information.

Parkway Shanghai, part of IHH Healthcare, one of the world's largest private healthcare networks, celebrated its 20th anniversary in China in December. The company said it remains confident in China's market potential and announced plans to open a new flagship ambulatory care center in downtown Shanghai this year. This follows the launch of Parkway Shanghai Hospital in 2023, an 84,400-square-meter facility built with an investment of 1.61 billion yuan ($222 million).

Prem Kumar Nair, group chief executive officer of IHH Healthcare, said the company is optimistic about new opportunities in China's healthcare sector given the government's ongoing efforts to liberalize foreign investment in the industry.