Exclusive Interview with Zhang Yihao, Former GE Healthcare China President and CEO: Localization of Foreign Enterprises Requires "Founder Mentality"

How can foreign companies transform into co-builders of China’s healthcare ecosystem?

Today, if Chinese-based foreign healthcare companies are still discussing localization, Zhang Yihao, former President and CEO of GE Healthcare China, considers this somewhat “outdated.”

Zhang’s career spans automotive, fast-moving consumer goods, and healthcare industries. He is deeply impressed by the localization strategies international brands in automotive and FMCG sectors began implementing in China 30 years ago. After entering the healthcare field, he has actively practiced localization strategies for foreign enterprises.

After retiring from GE Healthcare, he also crossed over to serve as an independent director at Fuhong Hanlin, participating in promoting Chinese innovative drugs going global.

As the 2026 “Sustainable Innovation in Medical and Healthcare Cases” selection begins, we conducted an exclusive interview with Zhang Yihao.

He believes that the sluggishness of foreign companies’ localization is a special phenomenon in the healthcare industry. However, the era of viewing China as a “high-speed growth engine” has passed. Deep localization has become a matter of survival. Localization is not merely about transferring production; it involves building an irreplaceable full-chain core competitiveness, truly empowering Chinese teams with trust. Foreign companies need to establish a mission to serve the Chinese people and adopt a “founder mindset,” transitioning from market participants to co-builders of China’s healthcare ecosystem.

Upgrading Localization Strategies Under Multiple Variables

In the past, foreign healthcare companies responded passively to policy and market changes. In recent years, they have begun to proactively invest in R&D and ecosystem building. Zhang believes that the success of localization depends on whether they can build an irreplaceable full-chain core competitiveness and trust in Chinese teams.

Jianwen Consulting: You once proposed “view China from a Chinese perspective.” Over the past few years, what profound changes have you observed in the localization strategies of foreign healthcare companies in China?

Zhang Yihao: Over the past decades, foreign companies have been adapting to fundamental changes in China’s market environment, healthcare policies, and customer needs. Especially in recent years, these changes have been significant. People from headquarters visiting every two or three years see that medical insurance payments, volume-based procurement, and national policies have all changed.

I think most foreign companies haven’t adjusted their strategies in time; often, they respond passively to market shifts. But there are positive signs—companies are starting to act. From early sales markets to local manufacturing and R&D, some are already building ecosystems and innovation systems.

However, local R&D alone isn’t enough. I believe that foreign companies actively establishing intellectual property rights in China is a truly long-term, leading strategy. Healthcare is a heavily regulated industry requiring long-term planning for product lines, approvals, and licenses. Being passive hampers response speed in China.

Jianwen Consulting: Why are these adjustments mostly passive? Is it because industry trend changes are hard to predict?

Zhang Yihao: I believe these trends are predictable. China’s “14th Five-Year Plan” clearly emphasizes policies for healthcare development. Focusing on technological innovation, emphasizing technological independence and controllability, promoting the transformation of industry-university-research, and developing AI+ have been ongoing for the past five years. The concept of strengthening primary healthcare has also long been proposed; it’s not new. Volume-based procurement and the “three medical linkage” were explored and practiced in Fujian’s Sanming medical reform years ago. China’s policies haven’t suddenly shifted; signals and groundwork have been laid long ago. The key is whether companies can keenly grasp these trends. Some foreign companies lack deep understanding and responsiveness.

Looking back to the 1980s and 1990s, importing advanced foreign technology could open markets. Now, the situation is different. Localization now requires local production, local sales, local R&D, and realization of intellectual property rights, along with increasing the proportion of localized core supply chains. This is the new trend and the future direction.

Jianwen Consulting: With the advent of generative AI and large medical models reshaping the industry, do you think the localization logic of foreign healthcare companies in China has fundamentally changed?

Zhang Yihao: China’s policy mechanisms and industry ecosystem are profoundly influencing global innovative drug R&D pathways. I believe AI will bring another significant revolution in this process. Currently, many Chinese companies, including some innovative firms in Zhangjiang, are actively experimenting. From an outsider’s perspective, I look forward to such changes, but most foreign companies’ actions are still relatively limited.

Foreign companies (in China) doing AI R&D face practical challenges—using DeepSeek or foreign models, data storage, operation methods, etc. These are serious considerations.

If China-based operations want to introduce localized AI capabilities, approval from global headquarters and compliance departments is often required, making the process complex and difficult to implement.

Jianwen Consulting: Has the positioning of the Chinese market shifted from a “growth engine” to a “capability platform” and “innovation source”?

Zhang Yihao: Absolutely. In innovation, the pharmaceutical sector has already achieved significant progress. As for devices, a notable advantage is that the entire R&D chain can be completed in China. Many device companies have thousands of R&D personnel, with product design IP rights held in China. They can launch new products within six months to a year and obtain registration certificates. Besides mid- and low-end products, high-end products can also be developed and manufactured in China.

From these perspectives, “In China for the world” not only refers to manufacturing but also to innovation. Looking beyond healthcare, in other industries—especially consumer goods—foreign CEOs in China have become regional CEOs or even global CEOs, indicating that China is not only exporting products but also management and innovation capabilities. I believe this trend will gradually manifest in healthcare, with more Chinese entities going global and becoming key players and leaders worldwide.

Jianwen Consulting: So, the localization of foreign companies is really about fully embracing and trusting local talent?

Zhang Yihao: Yes, everyone agrees on the direction of localization, but the key is whether they truly trust and value local teams. Long-term success depends on trusting local teams and giving them greater decision-making and R&D autonomy.

Jianwen Consulting: Are foreign healthcare companies now more focused on regional resilience and the “China+” strategic layout? Has localization shifted from a growth strategy to risk hedging and long-term stability?

Zhang Yihao: To answer the second question first. Some foreign companies, under short-term performance pressures, hesitate to invest in China. But I hope they can see the long-term importance and unique appeal of the Chinese market. Investment in China isn’t just to meet local demand but also to enhance global competitiveness.

Regarding “China+,” over the past five years, everyone has talked about “China+1.” The core logic is to establish backup capacity abroad while deploying in China. But why not “1+China”—having all capabilities available overseas also in China?

My view is that foreign companies’ teams in China should have a clear positioning: serving the Chinese market and users. The most important thing is whether products in China can achieve SQDCI—performance management based on Safety, Quality, Delivery, Cost, and Innovation. If products are globally leading in safety, stable in quality, with 99% on-time delivery, 20% lower costs than competitors, and continuous innovation, then whether it’s “China+1” or “1+China” won’t matter.

Jianwen Consulting: This reflects a long-term mindset. Having worked at Danaher for many years and leading GE Healthcare China for a long time, do you think most Greater China CEOs are as patient as you?

Zhang Yihao: As you said, I consider myself fortunate to have worked in these two excellent companies for so long. Long-termism, for me, is more a result of choice. I can’t control geopolitics or external factors; I can only focus on doing my job well—making good products and executing properly. If I do my best and the results aren’t as expected, I accept it because those factors are beyond my control. I always believe in first principles: doing the right thing and doing it to the best of my ability often leads to the right outcome naturally.

Rebalancing R&D, Business Models, and Organizational Systems

As localization deepens, foreign healthcare companies face not just single-dimensional adaptation but a systemic overhaul involving R&D, IP, organization, and business models. Zhang believes talent and IP are the two core elements of future competition. Meanwhile, reforms in medical insurance payments and volume-based procurement are forcing companies to rethink their business essence. Whether foreign managers in China can gain influence within complex global management structures is a ultimate test of strategic vision and leadership.

Jianwen Consulting: If we break down localization into R&D, IP, manufacturing, supply chain, market, and organizational dimensions, which will become more critical in the future?

Zhang Yihao: I think talent is the first. The phrase “an ironclad camp with flowing soldiers” describes the typical talent flow in foreign companies. Many startups in China are led by founders who have been committed for ten or twenty years. They possess a clear mission and a true “founder mindset”—willing to invest everything, even risking their own assets. In this context, how can foreign companies, with their “flowing soldiers,” compete with these founders?

Another key element is IP. For foreign companies, headquarters need to shift mindset—break regional IP thinking and see IP as a globally linked, locally grounded strategic asset. Only then can they effectively protect and gain competitive advantage locally. The same applies to Chinese companies: for foreign firms, it’s about localizing IP in China; for Chinese firms, it’s about international IP layout.

Jianwen Consulting: Foreign companies often face the challenge of balancing globalization and localization. What organizational structure and local talent system can truly support a company’s transition from “Chinese wisdom” to global influence?

Zhang Yihao: Honestly, it’s a big challenge. 20-30 years ago, as long as you did sales well, you could succeed in China because your product advantages—technology, brand—were obvious. But today, sales alone are not enough. The head of China operations needs to understand manufacturing, R&D, M&A, and even geopolitical sensitivities and complex situations. In other words, the leader in China is no longer a traditional regional manager but a hybrid with global vision and local wisdom.

However, many Chinese regional CEOs report to regional or international divisions or a BU president, not directly to the global CEO. This limits their influence on strategy and makes it hard to bring key China issues to global decision-making. Today, China is no longer just a regional topic but a strategic issue at the global CEO and board level. This presents unprecedented challenges for foreign executives in China—they must push strategy, coordinate resources, and influence top management without organizational support.

Before 2019, I thought China’s market was large and complex enough that internationalization wasn’t a high priority. But in the past five or six years, I realized this is no longer realistic. Geopolitical shifts, global supply chain restructuring, and rising technological barriers are raising the bar for China-based general managers.

There’s no easy solution. If someone already possesses all the skills—business acumen, strategic thinking, ability to handle local complexities, and influence global decisions—they might already be at a level comparable to a global CEO. In that case, why not choose to start their own company?

Jianwen Consulting: Mergers and acquisitions are often seen as key to localization, but data shows success rates are low. What do you think are the core factors influencing M&A success? What lessons can foreign companies learn for future China strategies?

Zhang Yihao: The first core issue is strategy. This isn’t just about M&A failure in healthcare but a universal problem—most M&As don’t add shareholder value.

Often, M&As are driven by short-term motives—like boosting stock prices with a “story” after a decline. If we return to first principles: what problem are you solving with this M&A? Filling product gaps, expanding regions, or building ecosystems? If the fundamentals aren’t solid and strategy isn’t clear, rushing into M&A in China or globally often leads to disaster.

Second, the value definition isn’t clear enough. Many M&As, especially during market hype, are driven by unclear strategies and herd mentality. Buying at market peaks inflates valuations, leading to overpayment and unfulfilled expectations.

Third, integration. If you can’t manage your existing business well, why trust that acquiring a bigger or worse company will succeed? Over 50% of global M&As fail. We should approach M&A with respect. I’ve seen many management teams hoping to create miracles through M&A, but reality often falls short.

Jianwen Consulting: Many pharmaceutical companies expand their product lines via BD (business development), which isn’t technically M&A.

Zhang Yihao: Exactly. China’s regulatory policies, market environment, large patient populations, real-world data, and high-quality talent support strong innovation in medical devices and pharmaceuticals—rare globally. BD is becoming a crucial way for multinational pharma to accelerate global R&D and commercialization. It leverages China’s unique advantages and compensates for foreign companies’ decision-making inefficiencies, bureaucratic hurdles, and long-term investment challenges. This is a clear strategy that addresses real issues.

That’s why in 2024, we expect about $60 billion in license-outs, over $130 billion last year—some of which may be driven by trends, but fundamentally, the first principles hold. It exploits China’s irreplaceable advantages, helping multinationals expand R&D pipelines and enabling global access to better drugs for cancer and complex diseases. It’s a win-win-win scenario.

Jianwen Consulting: We’re curious—your background was in consumables at Danaher and large equipment at GE Healthcare. After retirement, you shifted focus to pharmaceuticals. What’s your personal thinking behind this?

Zhang Yihao: I’m now an independent director at Fuhong Hanlin, a Hong Kong-listed company transitioning from biosimilars to full-scale innovative drugs, currently internationalizing. I joined to learn and explore. I strongly feel that the development and success of innovative drugs are ahead of medical devices. R&D in innovative drugs is riskier—results are often binary: either zero or one. It’s based on real data—effective or not, outcomes are clear. I’ve always been interested in innovation, so I want to contribute my experience and strategic insights to help drug companies go global, and also learn whether the successful models can be replicated in medical devices.

Jianwen Consulting: When it comes to product commercialization, innovative drugs face challenges similar to devices, both domestically and abroad.

Zhang Yihao: Yes. Recently, a popular video features Director Zhang Wenhong mentioning that some compare China’s BD of innovative drugs to “selling seedlings.”

Why do so many pharma and medical device companies still highly value the US market? Because the US has a unique mechanism for realizing the value of innovative drugs, allowing innovation to be fully rewarded. This is something we need to learn. The “14th Five-Year Plan” explicitly states the need to improve healthcare support for high-quality innovation in drugs and devices. It shows that we recognize a fundamental issue: innovation isn’t free; it requires sustained investment and returns to support long-term industry development. From a corporate perspective, we must encourage innovation and ensure that willing innovators receive reasonable rewards.

From Market Participants to Co-builders of the Healthcare System

The advanced stage of localization is when companies transcend being mere market players and become partners in co-constructing China’s healthcare ecosystem. Zhang believes that a key indicator of mature localization is a company’s contribution to China’s healthcare system—this requires foreign companies to truly adopt a “founder mindset,” prioritizing service to the Chinese people.

Jianwen Consulting: With ongoing reforms in medical insurance payments and centralized procurement, how should foreign companies respond?

Zhang Yihao: Over the past six years, I’ve visited Sanming, Fujian annually to study healthcare reform. I believe Sanming’s reform is not only a model for China’s healthcare system but could also serve as a future global reference. Whether it’s volume-based procurement or payment reforms, the country is building a basic healthcare system that most citizens can afford. Once you understand the logic and direction behind these reforms, many complex issues become clearer and more logical.

Jianwen Consulting: Many companies feel significant pressure from centralized procurement. How can they alleviate this?

Zhang Yihao: That’s why I keep saying “innovation isn’t free.” We need to dare to speak out and push for policy improvements. I tell my team to actively embrace healthcare reform. When you understand its essence and the real problems it aims to solve, you’ll see its significance and value, and won’t resist it.

Jianwen Consulting: Do you mean to accept it rather than oppose?

Zhang Yihao: Exactly. Many companies complain about volume-based procurement. When asked about my view, I say I don’t complain—I acknowledge the difficulty and imperfection but embrace it. This often shocks them. Volume-based procurement is fundamentally fair; it applies the same rules regardless of country or company. Its goal is to maximize the use of healthcare funds, meet the most people’s health needs, and make treatment affordable. This is a realistic and important goal. Instead of complaining, better to understand, adapt, and find your value point within this environment to solve problems.

Jianwen Consulting: Is this akin to practicing Tai Chi—using softness to overcome hardness?

Zhang Yihao: Tai Chi uses softness to overcome strength. I mean embracing change. The original intent of volume-based procurement was good—compressing profit margins into a reasonable range. The approach is effective, but we also need to leave space for innovation, so that innovative drugs and devices can earn fair returns. Otherwise, how can China’s innovation go global? In this process, embracing means being realistic—don’t hold illusions that this won’t happen.

Jianwen Consulting: In our 2026 “Sustainable Medical and Healthcare Excellence Cases” selection, industry emphasizes contributions to China’s healthcare system, including grassroots capacity building, clinical standard co-creation, talent development, and industry-ecosystem collaboration. Where do you see opportunities and pathways for foreign companies in “system contribution”?

Zhang Yihao: I strongly agree. Foreign companies in China should also contribute. Returning to the mission level, domestic companies often serve the Chinese market, while foreign companies have an international mission abroad. But often, the mission of foreign companies in China is just translating English, French, etc., into Chinese—lacking the true “founder mindset” of domestic companies.

I believe that foreign companies in China must prioritize serving the Chinese people and market. We should not only seek good revenue and profits but also do meaningful things for society and the local industry.

I remember clearly: on January 23, 2020, the first day of Wuhan lockdown during COVID-19, our ventilators were delivered to Wuhan Red Cross; in July 2021, during floods in Henan, we participated in emergency rescue; and since 2003, the “Spark Program” has supported rural female teachers in China’s poorest areas, providing training opportunities in Beijing.

When we understand our mission in China and adopt a true “founder mindset” to do the right thing, these actions happen naturally. We support local patients, stand with local doctors, and think about helping children in remote areas.