It's inevitable that China's infamous knock-off makers (called shanzhai 山寨) would increase their presence in the medical devices sector, attracted by a growing market for medical gadgets (thanks to an aging population) and a lot of attention and cash from the government for health-care reform.

For the most part these guys are sticking to the low-end, low-hassle products, much as they have done with cell phones, MP3 players, and netbooks. Some of the more popular devices you can find in Shenzhen are blood pressure monitors, pulse oximeters and glucometers (for checking blood sugar levels).

But watch out, says Xu Jin, chief marketing engineer of Microchip. He argues that while the existence of some “shanzhai” devices can help meet increasing demand, some could be life-threatening, particularly some disposal ones that must be sterilized before use. Several chip makers, such as Atmel, Lattice, ADI and Microchip, say they have implemented safeguards into their designs that make them unusable in “shanzhai” products. These guys are clever, though, and work-arounds are inevitable. 

We're not sure of the scale of this market, and will be looking into it in the near future. If you have any feedback, please feel free to contact us. inquiry@redtechadvisors.com