I was asked an intriguing question by a client today, one that will interest many of our readers competing within the global cord blood banking industry.
The question was:
“Is there any information available on laws and regulations on entering the blood bank industry in China? I am interested in two provinces in particular.”
My reply to this question is below, an answer that reveals a great deal about the security and market strength of existing competitors within china. I was happy to answer this question, because as President/CEO of BioInformant I work closely with our team of analysts that track the global cord blood banking market. We have also been following the cord blood banking market for a full decade now (2006 to present), which makes us well-suited to answer this question.
There are indeed limitations on entering the cord blood banking industry within China. Recently, the Chinese government established that it would only allow one cord blood bank in each of the Chinese provinces. The Chinese government therefore issues one cord blood banking license per province, and the licensed company must therefore function as both a public (donation-based) and private (for-profit) bank. The for-profit division funds the company’s donation-based public division, as no government support is received for this purpose.
China Cord Blood Corporation (CCBC) currently holds the exclusive license for three of the regions and has partial ownership in a 4th province. All of the other companies hold only one license each. As such, China Cord Blood Corporation is also the largest cord blood bank in the China, having either exclusive or partial operating rights within regions that account for nearly three-quarters of the annual births within China. It is also the fastest growing cord blood bank worldwide, according to Mr. Chen Bing Chuen (“Albert”), Chief Financial Officer and Director of the China Cord Blood Corporation.
However, from January 1, 2016, the Chinese government did begin allowing two children per family instead of one, so this has been a major boost for the cord blood banking market within China.
China also has unusually high rates of cord blood storage, as compared to other regions of the world. Rates of private cord blood storage can be as high as 5-8% of the population within select Chinese provinces. These rates are very unusual on a global basis, as storage rates for private cord blood storage average under 1% on a worldwide basis. As a point of comparison, the United States has the most mature cord blood banking market in the world and only 2.6% of U.S. parents privately store cord blood.
Meaning, there are opportunities within the Chinese cord blood banking market, but also a lot of regulatory restrictions.
Call for Questions: Are you interested in cord blood banking opportunities within China or cord blood banking opportunities within other regions of the world? If so, what questions may I answer for you? Leave them in the comments below and I will aim to answer your question next.
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To learn more about the cord blood banking market, view the “Complete 2015-16 Global Cord Blood Banking Industry Report.”