"The goal of the reform is to cut hospitals' involvement with drug sales so as to cut drug prices while increasing investment in medical care technologies," said Ying Xitang, CEO of Beijing Chemclin Biotech Co. Ltd. "I believe medical device companies that have products and offer maintenance services and consumables for their products will enjoy long-term competitiveness and profitability."

According to Ying, the reform will offer opportunities for medical device business in two aspects: governmental investment in equal health services in urban and rural areas demands basic and affordable products of good quality. The new cooperative medical scheme in rural China will also boost demand for such devices.

"The reform as well as the cooperative medical scheme will allow China's private companies to provide medical devices to second- and third-level hospitals, although currently Chinese hospitals import 70-80 percent of their medical devices," said Bill Li, Managing Director of Walden International. "I think diagnostic and testing devices with independently developed reagents will have huge market potential in China's second- and third-tier cities."

Lee Zhang, Chairman and CEO of iKang Guobin Healthcare Group, regarded health management as a "value-added service of medical care" and a niche left for private health care companies.

"The government will spend more than 10 billion yuan ($1.5 billion) on public health services in the next three years, though at a small proportion to the total medical reform fund," he said. "We have to raise social awareness of disease prevention and health management and urge the government to invest more in this so as to cut future medical expenses, especially as the country has an aging population."

Application is key

China's three mobile network carriers pledged to commit 400 billion yuan ($59 billion) to deploying 3G services in the next three years. Of the 3G pie, which includes network infrastructure and equipment, operating systems, middleware and applications, large companies such as Huawei and ZTE have already deeply involved themselves and dominated the infrastructure market.

"According to my knowledge, network equipment providers have to slash prices of their products by 30-40 percent each year in order to win contracts from China's three major mobile network operators," said David Yuan, partner and head of China of Redpoint Ventures.

In terms of opportunities for software companies, mobile phone users already have a wide choice of operating systems developed by Nokia, Apple, Microsoft, Google and others. But 3G applications such as video chat, online games and TV shows, are still open to innovations backed by private capital and remain a lucrative market potential.

These wireless application innovations will attract users to upgrade their mobile phones and subscribe for 3G services, Yuan said.

"3G applications are essentially different from 2G applications, because they are not limited to mobile phone as the terminal, and will help to cut data traffic charges and promote technological innovations to optimize varied formats of Web pages for easy reading on mobile phones," said Nian Chen, CEO and founder of Vancl (Beijing) Technology Ltd. "The three differences will allow startups great room for new applications."