China's medical device market has become a hot sector for mergers and acquisitions, as foreign and domestic players eye each other's markets, said a report conducted by global professional services firm KPMG.

During 2011 and 2012, at least 36 deals were closed in medical devices in China, with a total disclosed transaction size of $1.6 billion for 22 of them. Neither the deal numbers nor the size are large compared with many developed markets, but two of them - in 2012 and 2013 - stand out as a benchmark, indicating that medical devices are big business, according to Norbert Meyring, head of KPMG Life Science in China and Asia-Pacific.

Foreign manufacturers are building a bigger and more direct local presence by acquiring and merging, rather than setting up joint ventures, with Chinese counterparts. Chinese companies are seeking to upgrade and offer better quality products in and beyond their current portfolios and markets, he said.