Economy

GE Healthcare Weighs China Exit: How Political Tensions and Slowing Growth Are Reshaping the Medical Device Market

GE Healthcare explores selling its China unit amid economic slowdown and political tensions, facing declining sales.

September 18, 2025, 12:43 PM

General Electric medical equipment on display at the China International Health Industry Expo

General Electric (GE) medical equipment, including a mammography machine, is on display at the CHINA-HOSPEQ 2017 in Beijing, China. By testing / Shutterstock.com.

Executive Summary

GE Healthcare is reportedly exploring strategic options, including a potential stake sale, for its China unit amid escalating political tensions, increased domestic competition, and a decelerating economy.

The company has experienced headwinds in China, including a 15% decline in revenue from the region in 2024 and the impact of tariffs.

This strategic reassessment by GE Healthcare reflects a broader trend of eroding business confidence among U.S. companies operating in China.

The Story So Far

GE Healthcare is reportedly exploring strategic options for its China unit due to a challenging business environment marked by escalating U.S.-China political tensions, intensified domestic competition, and a decelerating Chinese economy. These factors, coupled with the impact of tariffs and weakened sales performance, have significantly diminished business confidence for foreign enterprises operating in the market.

Why This Matters

GE Healthcare’s exploration of selling a stake in its China unit signals a significant strategic shift by a major U.S. company, reflecting broader challenges faced by foreign enterprises due to escalating political tensions, tariffs, intensified domestic competition, and a decelerating Chinese economy. This potential divestment could indicate a growing trend of U.S. businesses re-evaluating their presence in China, potentially impacting global supply chains and investment strategies as companies prioritize de-risking in a complex geopolitical and economic environment.

Who Thinks What?

GE Healthcare is exploring strategic options for its China unit, including a potential stake sale, to navigate challenges such as political tensions, increased domestic competition, and a decelerating economy, while also seeking to shift manufacturing to “tariff-friendly” locations.

U.S. companies operating in China, according to a survey by the American Chamber of Commerce in Shanghai, have a record low optimism for their five-year business outlook, reflecting diminished business confidence due to escalating political tensions and economic headwinds.

Investors reacted to the news with a slight uptick in GE HealthCare’s shares, indicating they are closely monitoring and potentially approving of the company’s strategic adjustments in response to the complex dynamics of the Chinese market.

GE Healthcare is reportedly exploring strategic options for its China unit, including a potential stake sale that could value the assets at several billion dollars, according to a Bloomberg News report on Thursday. This consideration comes as U.S. companies operating in China grapple with escalating political tensions, intensified domestic competition, and a decelerating economic growth rate, collectively diminishing business confidence in the market.

Strategic Reassessment in China

The medical device manufacturer is working with advisors to evaluate these options, though sources familiar with the matter indicate that discussions are preliminary and no final decisions have been made. A spokesperson for GE HealthCare declined to comment on what they termed “market rumors,” but reiterated the company’s dedication to its patients in China, recognizing the nation as one of the largest global healthcare markets.

The reported move by GE Healthcare reflects broader challenges experienced by foreign enterprises in the country. The company has faced headwinds in China, including weakened sales performance and the impact of tariffs, with revenue from the region declining by approximately 15% in 2024.

Eroding Business Confidence

In July, GE HealthCare’s chief financial officer indicated the company’s ongoing efforts to collaborate with suppliers to shift manufacturing capacity to locations deemed more “tariff-friendly.” This strategy highlights the difficulties posed by the current geopolitical and trade environment.

The declining confidence among U.S. businesses in China was further substantiated by a recent survey from the American Chamber of Commerce in Shanghai. The survey revealed that optimism regarding U.S. companies’ five-year business outlook in China fell to a record low of 41%, underscoring a pervasive sense of uncertainty.

Market Reaction and Outlook

Following the news, GE HealthCare’s shares experienced a slight uptick, rising 1.4% in premarket trading. This development suggests that investors are closely monitoring the company’s strategic adjustments in response to the complex dynamics of the Chinese market.