Hearing implant maker Cochlear Limited (ASX: COH) says China is not the treasure pile at the end of the rainbow, despite the rising wealth of its middle class.
Speaking at the company's annual general meeting today, chairman Rick Holliday-Smith says China's health system is difficult to navigate and favours cheap locally made competing products.
He said strong growth will come from China within a decade, but not within five years. Mr Halliday-Smith says China's middle class is growing slowly.
An additional threat to Cochlear is a number of Chinese companies copying all the company's technologies and potentially violating all of Cochlear's patents. But Mr Halliday-Smith is confident Cochlear's quality will win out over the quality of the domestically produced cheap product.
Cochlear still remains the market leader in China despite competition from Western rivals such as Advanced Bionics and local manufacturers, according to the chairman.