China's central government has encouraged private sector to invest in nonprofit medical institutions by repealing a regulation that classified all private medical institutions as for-profit institutions.

A circular issued by Ministry of Health on Monday said that privately-run medical institutions could register as either for-profit or nonprofit, according to the nature of their business.

The repealed regulation, which was promulgated in 2000, defined almost all medical institutions supported by non-public funds as for-profit hospitals.

Nonprofit organizations in China enjoy many preferential treatments such as those related to approvals and taxation.

According to the ministry, 13,519 public hospitals and 8,864 privately-run hospitals were operating in China as of March.

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