Q: Construction of both Nanjing and Suzhou BenQ Medical Centers has commenced within the last two years. Can you explain why BenQ has moved from high technology to the unfamiliar field of health care?

A: BenQ has been an investor in China for four years. At any given time there are one or two hundred Taiwanese supervisors there, and the demand for medical treatment is very high. For the past ten years China has been developing very quickly on all fronts, and the one exception to that is medical care. BenQ has had in the past local employees who have become sick, gone to hospital and tragically ended up dying.

What's more, looking at it from the perspective of China's future growth, health care expenditure grows in direct proportion to GDP. If GDP grows 5%, medical expenditure will grow by at least 10%. The health care industry in China offers limitless commercial opportunities.

Q: BenQ chairman K.Y. Lee has said that based on BenQ's strategy for the Chinese market and the long-term outlook for health care, the company has opted to invest in hospitals as a way of giving something back to society. What did he mean by the "strategy for the Chinese market"?

A: If BenQ wants to establish itself in China, and to have brands with impact, we have to integrate with local people's lives. There are possibly people in Taiwan who don't know Formosa Plastics, but they definitely know Chang Gung Memorial Hospital, because Chang Gung has an intimate connection with ordinary people's lives.

The site for the BenQ Medical Center in Nanjing occupies 40 hectares. The city government hopes the whole surrounding area can be developed similarly to Taipei's Hsinyi District, and BenQ Medical Center is a representative foundation structure. All the advertising for the area now points out the close proximity to the Center, and one of the Nanjing subway stations is named BenQ Medical Center, creating a win-win situation both for the BenQ brand and for Nanjing's development.

Q: The BenQ Group's operations base is Suzhou. Why did you choose to open a hospital first in Nanjing?

A: BenQ is based in the Yangtze River Delta, and we were the first Taiwanese company to set up a factory in Suzhou. We later came to represent Taiwanese companies in Jiangsu Province, and our products were suited best for Jiangsu with Nanjing as first choice. Nanjing is the provincial capital, and it's also the most prosperous place in Jiangsu. The entire economic income of the province is first absorbed by Nanjing before being reallocated.

Secondly, the population structure of Nanjing is balanced, unlike Suzhou, which is a city of immigrants who are relatively young. One of the features of health care is that the older people are the more they need it. Nanjing has 48 colleges and universities, so it is easier to find qualified personnel. Even more important is that medicine worldwide is a highly regulated industry, and establishing a hospital in Nanjing puts it close to the Jiangsu provincial government, facilitating communication.

Q: In China there is the problem of high medical costs, and the average person can't afford to get sick. The investment in BenQ Medical Center was enormous. How will you recover that investment?

A: Nearly 70% of Chinese don't have insurance, rather like Taiwan 20 years ago, and the average outpatient cost is RMB200. Costs for hospitalization are even higher, at least RMB10,000, which is even more expensive than Taiwan. The problem in China at present is that the wealth divide is huge. There are more wealthy people than in Taiwan and they can afford high-quality medical treatment, but can't find a good medical environment.

For example, Beijing United Family Hospital is a specialist gynecological hospital and very expensive. The average cost for delivering a baby is US$10,000, but still a lot of people want to squeeze in. Its appeal is to those at the top of the pyramid, and these people care about quality. And it's the same for patients coming to the BenQ Medical Center. They know that if you want to stay at a five-star hospital you have to pay five-star rates. The investment in BenQ Medical Center was more than RMB1 billion, and it's not possible to recoup that immediately, but if the hospital is self-sufficient that will be good enough.

Q: In China there's a 70% limit on foreign investment in hospital joint ventures and a 20-year limit on operating them. What influence does that have on sustainable operations?

A: Health care is different from other industries. Every country has high levels of laws, standards and limits. It's not an open market. But 20 years is a long time, and it's not known how the law will change. We believe China will only continue to move ahead. Of course, we've also calculated the risks. At present our Chinese partners have only invested and have no part in running the operation, and BenQ has the majority of seats on the board.

Q: Taiwanese doctors are not allowed to practice in China. In future how will medical groups on either side of the Taiwan Strait divide their labor and cooperate?

A: This time next year we want to start recruiting local medical staff. At present China allows Taiwanese doctors to apply for a one-year temporary medical license. Taiwanese doctors can come over in a kind of guest arrangement, and we will use Taiwanese doctors to train local doctors and raise their standards. This will be a big attraction for Chinese doctors, because if they come to work at BenQ Medical Center they can have contact with Taiwan's top physicians.