China will allow foreign investors to wholly own hospitals in seven cities and provinces, the ministry of commerce announced last week, further opening up the country's fast- growing private hospital sector.

China’s private healthcare system is a powerful draw for overseas investors, as the strain on the state health system forces the government to permit investment in hospitals to take some of the pressure off.

The Republic's most recent former minister for health, James Reilly, explored the sector during his visit to China two years ago, looking at research on pharmaceuticals and medical devices, as well as exploring what advantage Ireland might represent as a template for organisation and delivery of healthcare.

McKinsey & Co forecasts that China’s healthcare spending is set to hit €760 billion by 2020.

Under the new rules, wholly foreign-owned hospitals are permitted in the cities of Beijing, Tianjin, Shanghai and the provinces of Jiangsu, Fujian, Guangdong and Hainan.

The announcement seems to have come after a deal announced in July to pilot the first wholly foreign-owned hospital in China in the Shanghai Free Trade Zone.

There were about 5,400 private hospitals in China in 2008, but this doubled to 10,877 by the end of October 2013, according to official figures.

Public hospitals, which provide 90 per cent of China’s medical services, totalled 13,440 by the end of October.

A Deutsche Bank report in June said a further 8,000 public hospitals were likely to be privatised over the next five to 10 years.