Chinese medical device companies are enhancing their presence in the domestic market and closing the gap with foreign peers in terms of innovation, industry insiders said.

One of the most important factors driving the rapid growth of domestic medical device companies is the country's innovation-driven development strategies and policies, which urge Chinese companies to focus on innovation and research and development as well as pay close attention to intellectual property protection, said Xu Shan, secretary-general of the China Association for Medical Devices Industry.

From central government departments to local governments, many policies have been implemented to promote the development of the medical device industry.

Health authorities have established fast-track review and market approval processes for medical device innovations, and medical device companies that have promising innovation and R&D capabilities enjoy favorable financial, policy and service support, especially if they are located in industrial parks or development zones, Xu said.

That is especially important considering the fact that medical devices were often only a part of the overall pharmaceutical industry in China's development guidelines and policies in the past, she said, stressing that in recent years many national-level policies specifically targeting the medical device industry have been issued and carried out.

She added that the rapid growth of Chinese medical device companies in terms of both quantity and quality is laying roots in the fast expansion of the domestic market.

"Domestic demand for medical devices is growing exponentially as Chinese people care more about health and living standards," Xu said.

"For companies, that means great investment return prospects－especially because such demand is persistent and is not likely to fade like many other sectors including catering and services due to periodic external shocks."

Wang Sizhen, co-founder and CEO of Genetron Holdings Ltd, a Beijing-based company with expertise in genetic solutions, said China has unique advantages in developing its medical device industry because the development of new products relies heavily on quality data from clinical practice and clinical experiments. In the most populous country in the world, it is relatively convenient for Chinese companies to collect and make use of data efficiently.

Also because of China's large population, the huge medical device demand from clinical practice－together with supportive government policies－creates a favorable environment for domestic companies to grow, he added.

"Although China started late in developing its own high-end precision medical devices, it is obvious that we are making rapid progress driven by growing clinical demand and enhanced government regulations. Many Chinese medical device companies, especially in the in vitro device and biotech sector, are no longer followers, but are increasingly making innovations that take a lead in the industry," he said.

The genomics sector is a good example of this, Wang added.

Companies such as BGI Group, Genetron Healthcare and Berry Genomics are not only pioneers in the genomics industry in China, but also are becoming highly recognized outside of the country.

Some Chinese companies are already ranking among a select number worldwide that can develop and produce the industry's most cutting-edge next-generation sequencing systems and kits, while the genetic testing service market in China is already dominated by Chinese firms.

In the application of genetic engineering to the pharmaceutical sector, Chinese companies have participated deeply in the entire industry chain, from drug testing and development to clinical trials and diagnostics.

Such integration into the whole industry chain is a major advantage for Chinese companies to advance their development, he said.

Xu also said the gap between domestic medical device companies and foreign rivals is shrinking.

Although multinational companies have a majority share in the high-end market in China, Chinese medical device companies already have a strong presence in the mid to high-end of the domestic market.

As domestic companies strengthen innovation, IPR protection and international cooperation with the ever-improving regulatory environment, they are catching up with foreign companies in the high-end market, she said.