Community members are now allowed to invest in public hospitals, the General Office of the State Council and the Ministry of Health said.

The statement is meant to attract investors' attention to the restructuring of public hospitals. The government also hopes that venture capital firms consider investments in public hospitals and see it as a profitable business, the Economic Information Daily reported.

"The policies have already allowed funds from the community to set up medical institutions," Song Shuxin, a spokesman of the Ministry of Health, was quoted by the Economic Information Daily as saying.

He said that community funds were now being allowed to invest in public hospital in some regions as pilot projects. For example, the public hospitals in Kunming, Yunnan province, are accepting funds for restructuring programs.

With the high gross margins of public hospitals and constant demand for medical treatment, public hospitals could become new favorites for investors, observers said.

However, some are reluctant to put money in public hospitals. They say that it's mostly a non-profit business, with no returns on short-term investments and unpredictable long-term profits. Some believe that investors should stick to traditional medical service channels, such as high-end medical service agencies and private specialized hospitals.

mengfanbin@chinadaily.com.cn