As sperm counts drop and affluence rises in China, the fertility market cashes in

As China relaxes its one-child policy, factors like lower sperm counts, later pregnancies and other health barriers are making it harder for many to get pregnant.
As China relaxes its one-child policy, factors like lower sperm counts, later pregnancies and other health barriers are making it harder for many to get pregnant. PHOTO: AFP

BEIJING (BLOOMBERG) - On a recent afternoon, a visitor from northern China took a cigarette break outside the Beijing Perfect Family Hospital.

Cigarettes were one reason he had come to the capital city: he reckons his nicotine habit played a part in damaging his fertility.

The 38-year-old construction businessman, who asked to be identified as Mr Zhang, worked hard to build a business with his wife, who is 35. But when they were finally ready to have kids, it was a struggle.

So the Zhangs became one more couple among millions of Chinese to turn to an assisted reproductive health market that has the potential to be worth about US$15 billion (S$21 billion).

A paradox has emerged in China: As the country finally relaxes its one-child policy, factors such as lower sperm counts, later pregnancies and other health barriers are making it harder for many to get pregnant.

As a result, businesses from China to Australia, and even California are lining up to help - and profit from - the growing market of hopeful prospective parents.

Families in the world's most populous country are willing to pay top dollar for fertility therapies. Mr Zhang said his package for IVF, or in vitro fertilisation, was 100,000 yuan (S$20,300) for each round.

"Now that our economic conditions are better, we all want children but it's hard for a lot of us," he said, puffing on his second cigarette. "All the years of smoking and drinking and business dinners take a toll. It's difficult for me and my wife to conceive naturally and we needed help."

For decades, couples in urban China were only allowed to have one child, but the country, which is trying to boost its shrinking workforce, now allows two.

China's market for IVF alone was worth US$670 million in 2016 and is expected to surge to US$1.5 billion in 2022, according to BIS Research.

Assuming that 65 per cent of infertile couples choose to seek treatment, the total assisted reproductive health market could someday be worth about 107 billion yuan, brokerage firm Hua Chuang Securities calculates.

Sperm counts dropped very significantly from 100 million in the early 1970s to as low as 20 million in 2012 in China, according to Mr Huang Yanzhong, senior fellow for global health at the Council on Foreign Relations.

The higher stress levels accompanying economic development, pollution, late marriage and late childbirth, smoking and alcohol use could be contributing factors, he said.

A study in central China showed that only about 18 per cent of those tested had healthy enough semen to be sperm donors in 2015. That number had been much higher at 56 per cent in 2001, according to the study, which was published this year in the medical journal Fertility and Sterility.

Many Chinese women, meanwhile, are choosing to have children later as they pursue their careers.

Yet the desire to have biological children looms large, and that is driving demand for services like IVF.

Virtus Health, an Australian company that offers fertility treatments, receives regular approaches from Chinese firms looking for partnerships, but getting a local licence is difficult. Virtus now works with medical tourism agencies in China that help patients get to its Australian and Singapore clinics. It has Chinese-speaking fertility specialists, scientists and nurses, and its websites are translated into Chinese, according to the firm's chief executive officer Sue Channon.

Thousands of miles away in the US, Dr Mark Surrey, co-founder and medical director of the Southern California Reproductive Centre in Beverly Hills, says about 20 per cent of its patients came from China over the past year.

"There are increasing numbers of people in China who have the socioeconomic means to choose what kind of reproductive technology that they would like," Dr Surrey said.

Among other services, the centre's California-based clinics offer tests to learn the gender of the embryo. Such services can be particularly attractive to patients from mainland China, where gender selection is banned.

At home, China's "public facilities are quite overburdened, which significantly impacts the patient experience", said Ms Roberta Lipson, chief executive officer at United Family Healthcare, partly owned by China's Shanghai Fosun Pharmaceutical Group. 

Her company has been conducting IVF and fertility services in the northern city of Tianjin for over two years, with clinical expertise from around China, as well as from the United Kingdom and Australia.

"We hope to get licensed in our other cities throughout China to provide a more convenient option for private patients," Ms Lipson said in an e-mail.

Still, Chinese patients face a number of regulatory hurdles at home. Single women, for instance, are not allowed to freeze their eggs in the country. Such restrictions have many patients considering trips abroad.

As of last year, the country had 451 sperm banks and medical institutions licensed to provide reproductive care, the National Health and Family Planning Commission estimates. But that is outpaced by demand in a country of 1.4 billion people.

"Assisted reproduction has become one of the fastest-growing, high-potential fields in China's medical market," analysts at Haitong Securities wrote in a January report.

Overseas hospital operators like IHH Healthcare, which is listed in Singapore and Malaysia, Thailand's Bumrungrad Hospital and Bangkok Dusit Medical Services are among those likely to benefit from increased patronage from Chinese patients, said Ms Laura Nelson Carney, an analyst with Sanford C. Bernstein.

Mr Zhang, standing on the busy and narrow street in downtown Beijing, said he knows many others with similar troubles. "Our friends can talk about it openly," he said. "Many of them used IVF too."

The process requires multiple visits to Beijing: The Zhangs visited in November for the extraction of eggs and sperm, and again in March for preparations. Still, he will likely consider having two children - if the first attempt does not result in twins.