Last checked at 
BEIJING, May 28 (Reuters) - China will ease curbs on foreigninvestment in joint-venture hospitals, the government said onWednesday, as it deepens a sweeping overhaul of its healthcaresystem aimed at cutting costs and sprucing up overloaded publicservices.
China is an appealing market for pharmaceutical firms andmedical-equipment makers, with spending in the industry expectedto nearly triple to $1 trillion by 2020 from $357 billion in2011, according to consulting firm McKinsey.
In a healthcare reform plan for 2014 published on itswebsite, China's cabinet, the State Council, said it aimed torelax limits on foreign investment in hospitals on the mainland.
The plan involves overhauling the management of medicaljoint-ventures that involve overseas partners, including"reducing restrictions on the percentage of foreign ownership inmedical JVs and collaborations," it said in the statement.
The move would increase the number of cities where investorsfrom Hong Kong, Macau and Taiwan could set up wholly-ownedmedical institutions, and allow overseas investors to set upwholly-owned hospitals in designated areas, such as the Shanghaifree trade zone.
The statement gave no details of the timeframe of the easingor the changes in holdings.
The ambitious overhaul also aims to bolster insurancecoverage and crack down on graft, key areas for President XiJingping, who is looking to improve access and cut healthcarecosts for the country's population of nearly 1.4 billion.
Since 2009, China has spent 3 trillion yuan ($480 billion)on healthcare reform, but the system still struggles with ascarcity of doctors, attacks by patients on medical staff and afragmented drug distribution and retail market.
China will tighten up on drug distribution by clamping downon fake drugs, kickbacks to doctors and illegal sales tactics,the government said in the statement.
Chinese authorities charged executives at British drugmakerGlaxoSmithKline Plc earlier this month with corruption,in an intensifying crackdown on graft and high prices in thecountry's healthcare sector.
AFFORDABLE
Authorities will also look to bolster drug price monitoringand transparency, as well as toughening price supervision ofimported drugs and medical equipment, the State Council said.
The government said new policies would increase prices formedical services, such as surgery and diagnosis, while loweringdrug prices by reducing mark-ups and through a government-runmedicine procurement scheme focused on lowering costs.
China's underfunded network of 13,500 public hospitalsrelies heavily on drug sales, contributing to inflated prices,kickbacks and tension between patients and doctors.
About 40 percent of public hospital revenue in 2011 camefrom prescribing drugs, Health Ministry data show, while medical services accounted for just over half, with governmentsubsidies and other income making up the rest.
Health authorities will also extend to the entire country aspecial insurance system to help battle major illnesses.
Many people complain that serious illnesses, such as cancerand diabetes, can bankrupt households under the current system,where patients often have to pay much of the cost out-of-pocket.
China will also boost subsidies for basic medical coveragefor rural and urban residents by 14 percent to 320 yuan perperson annually, the Ministry of Finance said on Tuesday.
More assistance will go to China's poorer western andcentral areas, as the government looks to close the healthcarequality gap with the east coast and inland regions.($1=6.2486 Chinese yuan) (Reporting by Li Hui and Adam Jourdan; Editing by ClarenceFernandez)
