According to a draft of Administrative Regulations on Health Inspection Institutions that was published on October 26 for public comment, such institutions are not allowed to operate until they register in local public health departments and acquire qualification certificates.

One industry insider says that the draft indicates that the government has become strict about foreign firms’ access to the industry, and despite the upper limit of foreign ownership being relaxed to 70%, every opening of a new chain has to go through examination and approval procedures of the State Ministry of Health, which are usually rigorous and take at least half a year.

According to this insider, the Ministry’s prudence stems from hoping to use foreign capital to bolster funds in public health care on the one hand, and fearing the potential shock that capital inflow will bring to the market on the other. If skilled professionals in public institutions are lured into foreign-invested firms by high salaries, they say it will be harder to stick to the reform’s principle of serving public interests first.

Despite this, investors like Yu are optimistic. “The health care service industry is a special one, and certainly, stricter standards should be required of health care chains than to, say, hotels,”  adding that he’s totally ready for the challenges and has begun preparing.