Heart patients at Shanghai’s Zhongshan Hospital can now benefit from the expertise of CardioMind, a new Chinese artificial intelligence (AI) system for diagnosing and treating cardiovascular disease that started a trial run at the end of February. Administrators are confident that it can evolve into an independent AI cardiologist.

“We don’t just feed it data, we teach it to think like a top expert,” said Ge Junbo, director of Zhongshan Hospital’s cardiology department. The hope is that CardioMind can ease pressure on the department’s 136 physicians who handled 820,000 outpatient visits last year—a ratio that reflects the strains on China’s healthcare system.

The introduction of CardioMind in one of China’s top hospitals is an example of the increasing importance of AI in the Chinese healthcare system as a whole.

“There is interest across the board in China’s health sector in applying AI to improve quality, efficiency and equity in healthcare,” says Tang Shenglan, director of global health at Duke Kunshan University in Kunshan. “China’s economic growth has slowed but the rapid cost escalation of health care is not sustainable, so AI could reduce the cost to improve economic efficiency.”

The medical AI revolution

The promotion of AI-powered healthcare in China is growing rapidly, with government and private enterprise alike searching for new solutions to a wide range of pressing issues.

“China’s population is aging rapidly, leading to an increased burden on its healthcare system,” says Damien Ng, next generation research analyst at Swiss wealth management group Julius Bär. “AI can help alleviate this pressure by improving diagnosis accuracy, streamlining clinical workflows, and enhancing patient care. At the same time, with increasing economic prosperity, more Chinese citizens are seeking better healthcare services, driving up demand for medical resources. AI can help optimize resource allocation, reduce wait times, and improve access to quality care.”

Chinese brokerage Guosen Securities forecast in a research report in February, that China’s healthcare market is expected to grow by 9.8% year-on-year to ¥14.2 trillion ($1.95 trillion) in 2025 and then rise to ¥15.6 trillion next year. Much of this growth owing to AI spending

“AI is being deployed heavily in the context of our current ‘sickcare’ model of health in the Western world, especially in areas like imaging and diagnostics, predictive health, personalizing treatment, automating administrative tasks and also in drug discovery,” says Tina Woods, a healthcare entrepreneur and the author of Live Longer with AI.

Transforming drug discovery

In China, AI shows up most prominently in medical imaging, where it can help improve diagnostic accuracy. AI shortens image reading times and helps offset issues caused by an acute shortage of radiologists in China—averaging only one per 70,000 people, compared to the 1:7,000 ratio in the US. The market for AI medical imaging solutions is predicted to grow to ¥44.2 billion this year from less than ¥1 billion in 2020.

AI tools have also made an impact in Chinese drug research and development (R&D) by transforming and accelerating how scientists discover, design and test new medicines. The first drug discovered and designed with generative AI, targeting an increasingly prevalent form of lung fibrosis, entered clinical trials with human patients in China and the US in 2023.

The developer, Insilico Medicine—a US biotech unicorn backed by Baidu and Kai-Fu Lee’s Sinovation Ventures—discovered the drug in less than 18 months at a cost of less than $3 million, representing a significant reduction from the average timeline of six years and an average cost of more than $18 million. The company is now working with Chinese conglomerate Fosun on a cancer immunotherapy that was developed in just nine months.

Chinese AI platform DeepSeek is also set to accelerate AI deployment in the healthcare system. “The integration of DeepSeek AI models into digital healthcare systems will significantly improve the efficiency and accuracy of existing AI healthcare solutions and bring a positive boost to the digital elementalization and assetization of smart healthcare in China,” says Albus Zhou, executive director for Greater China at Frost & Sullivan.

Chinese digital healthcare companies including Ping An Health and ClouDr have already announced the embedding of the model into their own platforms and infrastructure.

AI is also contributing to medical IT improvements through public health digitization. In September 2024, the National Healthcare Security Administration (NHSA) revealed that using AI it had uncovered thousands of cases of fraudulent insurance claims made by hospitals, such as gynaecological treatments for male patients. A month later the agency exposed another insurance fraud case involving more than ¥100 million of fake prescriptions forged by four pharmacies in Harbin.

“The NHSA has been using AI data processing to identify fraudulent insurance claims by some hospitals,” says Tang. “The healthcare management applications for AI can be powerful because there is a lack of people to check all the claims but AI can automatically identify flawed claims.”

China’s market for AI-empowered healthcare is expected to grow by nearly one-quarter on average every year during 2025-2030. Funding and investment is coming from a mix of central and local governments, and venture capital (VC). The Ministry of Science and Technology (MOST) is a major player on a national level, throwing significant resources and support into AI in healthcare, according to Tang. “Provincial governments also have their departments of science and technology, through which they channel some of their annual budget into local universities, hospitals and the private sector.”

VC funding has also played a role as deep-pocketed players look to capitalize on China’s growing healthcare needs. For instance, 11% of the 632 startup investments made by Tencent in the five years up to May 2024 were in healthcare.

Investment in AI

Global investors poured more than $60 billion into healthcare AI startups in the decade up to the end of 2023, according to Flare Capital Partners, with half of this figure invested in 2021-2023 alone. The US is the frontrunner with venture funding in healthcare AI forecast at $11.1 billion in 2024, up from $7.2 billion in 2023.

In China, January saw the creation of the National AI Industry Investment Fund with initial capital of ¥60 billion. In addition to the substantial funding, the government has offered tax incentives and subsidies to encourage the development and deployment of AI healthcare technologies.

“The US leads the pack, but the UK and China are powerful players too,” says Woods. “China is poised to be a disruptive force as we have seen recently with DeepSeek.”

The prognosis is promising when it comes to China’s development of AI healthcare technologies. The national health insurance system covers more than 95% of the 1.4 billion-strong population, providing a vast bucket of healthcare data that can be leveraged for AI model training and validation.

This is aided by a top-down commitment to digitalization, including in the Healthy China 2030 and Made in China 2025 initiatives, which has enabled China to make significant progress in implementing electronic health records. Some 70% of hospitals have adopted digital record-keeping systems, providing a rich source of structured and unstructured data for AI applications. Central authorities have also invested heavily in genomic research and generated large amounts of genomic data, which can be used to develop personalized medicine and targeted therapies.

Providing a solid foundation for AI healthcare innovation is the rapid growth in telemedicine platforms such as Tencent-backed WeDoctor, JD Health and Alibaba Health, which provide remote healthcare services and generate valuable data for AI applications. Their popularity underscores a high level of digital health literacy in China, where a digitally savvy population is more likely to engage with digital health technologies, facilitating the adoption of AI-powered healthcare solutions.

China’s growing AI prowess means that while it is firmly in an era of strategic competition with the US, bilateral cooperation on health has continued between the two countries. Last summer a team of researchers from Peking University, the University of Washington and AI tech firm INF Technology Shanghai created an AI model to improve drug R&D that outperformed competitor models.

This came after the US National Institutes of Health and China’s MOST launched a joint initiative in 2019 to advance the use of AI in healthcare analytics. The European Union’s Horizon 2020 program has also funded several projects that involve Chinese partners, focusing on personalized medicine, genomics, and precision oncology.

But it remains to be seen how quickly Chinese companies will be able to find export markets for their technologies given lingering skepticism of made-in-China products and a higher bar of healthcare-related products and services.

“In developed countries, Africa and Asia, they still think the medical products produced by the US and Europe are much better quality than the ones produced in China,” says Tang. “This prejudice is starting to change but still needs time.”

Issues with healthcare AI

While China has made significant strides in developing AI healthcare technology, Chinese companies and researchers still face several barriers. One of the most prominent is data quality and availability.

“Data quality is a major challenge. In some hospitals, particularly those in the central and western parts of China, quality can be quite poor. If the companies that are building the AI modelling are not aware of that, then there will be a problem,” says Tang. “The central government wants to develop criteria, guidelines, standards, but not all hospitals follow these standards rigorously.”

China’s regulatory environment for AI in healthcare is still evolving and lacks clear guidelines on issues like data protection, algorithm validation and liability. Intellectual property protection has been an ongoing consideration for companies operating in China, and while authorities have made strides in recent years, businesses believe that further progress is needed to safeguard their AI innovations, and this in turn will enhance their collaboration with international partners, according to Ng.

The gradual integration of AI in the medical field is a boon for healthcare precision and efficiency, but Tang says AI cannot replace the personalized care and compassion provided by human doctors.

And while the hope is that AI can democratize healthcare access, the opposite could also be true in that it can perpetuate existing biases and inequalities within the system that go on to disproportionately impact marginalized populations.

Health matters

The frenzy over DeepSeek in January highlighted Chinese advances in AI, but the truth is the technology has been quietly revolutionizing China’s healthcare industry for several years. Already deployed at world-leading scale and depth, AI is set to play a crucial role in making Chinese healthcare more predictive, preventive, personalized and participatory, empowering people to be more involved in their health.

The outlook is clearly promising, and despite some regulatory, data privacy and ethical concerns to be dealt with, we are likely to be meeting with AI consultants such as CardioMind alongside our doctors in the near future.