Shenzhen Siemens MR Co Ltd is one of Siemens Healthcare MR's three global R&D and manufacturing headquarters. The other two are in Erlangen, Germany, and Oxford, the United Kingdom.
Ohnesorge said that the expansion project, due to start this summer and continue into the next year, will double its manufacturing capacity in Shenzhen.
New investment will also involve R&D to expand the company's portfolio to meet the special needs of county-level hospitals.
Philips Healthcare, for its part, has been competing with new and affordable products and solutions developed in cooperation with Neusoft Corp, a Chinese provider of IT solutions and services.
GE Healthcare, Siemens Healthcare and Philips Healthcare together account for 70 percent of China's high-end medical device market, said a report from the Samsung Economic Research Institute.
"One of the focuses in China's latest round of healthcare reforms is the development of the grassroots market, especially the rural sector. Central government investment in the last round - from 2009 to 2011 - exceeded 63 billion yuan ($9.86 billion), supporting the construction and renovation of 33,000 county-level hospitals, rural clinics and community medical centers," said Liu Ximei, an analyst at Chinese research company Forward Business Intelligence Co Ltd, adding that local governments also invest in this type of construction, although there are no official statistics.
"We expect the investment will increase over the next three years," she said.
Development support
Ohnesorge said his company's products aimed at the grassroots market are not "cheap", adding that Siemens Healthcare China aims to maintain a balance between quality and affordability, although this is not easy.
The company has adopted an accessible innovation strategy to develop products with lower costs and higher value.
Duan from GE said that cost savings can be achieved through technological innovation and local supply.
"Many newly developed technologies and solutions have helped us use economical raw materials or streamline manufacturing and logistics process, resulting in cost reductions," she said.
So far, around 70 percent of the components the medical device producer buys are from local suppliers.
She added that demand in China's grassroots market is diverse, due to the large size of the nation and different economic and geographic conditions in various areas.
"What rural clinics need is likely to be different from community health clinics. We are diversifying our products to precisely meet various requirements," Duan said.
Zhao Hui, planning and finance department director of the Qinghai health bureau, said that he prefers the stability and durability of GE Healthcare's equipment.
In the recent round of equipment upgrades for rural medical institutes, 16 GE computed tomography machines were purchased by the provincial government via public bidding.
The US-based company donated five Vscans to Qinghai's township health center in April. Zhao said that the machine is really good in terms of convenience, efficiency and quality.
"But I don't think we can buy it so far, since it's too expensive - 200,000 yuan per unit, while the budget per center is only 100,000 yuan," Zhao said.
So far, more than 200 Vscans have been sold in China, with the majority going to major cities' large hospitals. Liu Simin said that the price will ultimately drop, when manufacturing takes place on a large scale.
Xu Jianmin, radiological department director of Shenzhen People's Hospital, said that his hospital has been using an MR machine, developed and made by Siemens Healthcare China, for five years, and no big problems occurred.
If there are any problems, after-sales engineers can solve them on the same day, he said.
However, Xu said that if these machines go to the rural market, education and training should be strengthened, as diagnoses based on equipment data is a kind of professional work, which needs knowledge and experience.
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