The Third Plenum emphasized deepening the reform of the medical and health system. Hyomi Jie, a manager at Fidelity International Fund, stated that the Chinese healthcare industry covers a wide range of fields, including traditional Chinese medicine and biotechnology. With the aging population in China, the role of this industry in economic growth is becoming increasingly important. A research report from the World Bank suggests that China's annual healthcare spending is expected to increase from $500 billion in 2014 to over $2 trillion by 2035. As the market size continues to grow, Chinese healthcare-related companies are expected to benefit directly. Although there are short-term policy risks, the excellent performance of Chinese medical equipment companies and biotechnology companies in recent years indicates the growth potential for long-term investment in this industry. Despite the healthcare industry accounting for only 4% of the MSCI China Index currently, given the significant upward trend in demand, it is recommended to maintain a high allocation to this industry throughout the entire cycle. Fidelity mentioned that there are bright spots in the industry, including hospitals that play a crucial role in key medical fields and demonstrate resilience throughout the policy cycle. In addition, there is a significant demand gap for cancer patients and other critical illness treatments, as well as the overall healthcare products and services in lower-tier cities, which presents unique opportunities for private hospitals. The increasing prevalence of age-related chronic diseases and cases is driving the demand for various medical devices such as imaging detectors, respirators, endoscopes, etc. From 2012 to 2022, China's total healthcare expenditure by the government and households more than doubled, reaching 8.5 trillion yuan (approximately $1.2 trillion). Despite macroeconomic challenges, the increase in healthcare spending and the shift in lifestyle towards health promotion will continue to support the rapid development of Chinese medical equipment manufacturing companies. In identifying potential winners in the healthcare industry, the focus is not only on advanced technology. Chinese medical equipment manufacturing companies will benefit from the government's billion-yuan plan to enhance the diagnosis and treatment capabilities of critical illnesses by 2027 and promote the construction of a closely-knit county-level medical and health community. Advanced technology and government support will help Chinese medical equipment manufacturers improve their price competitiveness to compete with their European and American counterparts. Although traditional Chinese medicine has little to do with innovation, it still holds 15% of the Chinese healthcare market and has long been supported by consumers and the government. Fidelity analysts observe that despite the recent challenges facing the Chinese and global economies, the long-term structural growth trend in China's healthcare demand continues, making the healthcare industry an attractive investment sector in the coming years.