Private hospitals solely owned by foreign investors will be allowed to open in seven cities and provinces, the Ministry of Commerce (MOFCOM) announced on August 27.

Wholly foreign-owned hospitals will be permitted in the cities of Beijing, Tianjin, Shanghai and Jiangsu, Fujian, Guangdong and Hainan provinces. Foreign investors will be either able to set up a new hospital independently or take part via mergers and acquisitions.

However, the MOFCOM specified that only investors from Hong Kong, Macao and Taiwan may set up hospitals featuring traditional Chinese medicine.

Administrative approval procedures will be handled by provincial-level authorities.

The Chinese Government has stressed reform in its healthcare sector following public demand for more and better healthcare services. A State Council statement in May pledged price reforms in public hospitals and that more private hospitals would be established.

There were about 5,400 private hospitals on China's mainland in 2008, with that number rising to 10,877 by the end of October 2013, according to official figures. Public hospitals, which provide 90 percent of China's medical services, totaled 13,440 by the end of October.