China’s push for health-care reform is expected to widen the available market for X-ray machines in the near future, especially in mid-tier cities and rural areas. But many Chinese companies will be left behind due to a lack of R&D.

There are about 16,000 county-level hospitals in China. It’s expected that the push to improve health care will create huge demand for low-and mid-end medical devices, such as X-ray machines, in these facilities. The estimated market scale in 2012 is $900 million.

However, many local companies still lag in core technology compared with overseas companies. For instance, they usually have a low level of automation and are weak in software development. Unless this changes (and we don't see it happening soon), Chinese firms will miss out on their own government's largesse.