SAN FRANCISCO, Jan 13 (Reuters) - Philips CEO

Roy Jakobs said he still expects subdued demand in China this

year due to healthcare anti-corruption efforts by the Chinese

government that has hurt revenue there for Western companies.

Jakobs in a Sunday interview said volatility in the Chinese

market could increase this year depending on the foreign trade

policies adopted by President-elect Donald Trump, who takes

office Jan. 20. Trump has previously said he will hit China with

new tariffs on the first day of his presidency.

"Anti-corruption is still continuing on the ground. We still

see audits happening and a lot of scrutiny (over purchases),"

Jakobs told Reuters at the annual JPMorgan health conference in

San Francisco. "I think 2025 will still be a challenging year

for China." He previously said the Chinese have been auditing

past purchases.

The Dutch healthcare technology company's Chinese sales had

topped out above 13% of its total revenue earlier in the decade.

Philips' offerings in China include diagnostic and monitoring

equipment, as well as personal health products and appliances.

Due to the government anti-corruption efforts and slower

growth in China, Jakobs said he now expects the biggest Asian

market to be around 10% of the company's revenue.

Philips is expected to report more than 18 billion euros

($18.39 billion) in 2024 revenue when it issues its full-year

financial results next month.

Jakobs said he does expect the China market to recover based

partly on meetings with Chinese government officials during a

visit there in November, including regional officials who said

they were still welcoming foreign businesses and investment but

wanted to ensure fair procurement was taking place.

Beijing has been running a campaign targeting bribery of

doctors that disrupts business and scuttles hospital deals with

international healthcare companies.

Philips was one of several global companies to warn about

the health of the Chinese economy last October, saying demand in

the country had slumped significantly because of a deterioration

of consumer confidence combined with the anti-corruption

campaign.

Merck & Co ( MRK ) also said in October that its results had

been hit by weak sales of HPV vaccine Gardasil in China that

were likely to carry over into 2025 - and could last the whole

year - as the shot's distributor there reduces inventories amid

lackluster demand.

AstraZeneca's ( AZN ) president of Chinese operations was

arrested last year. The company has said it does not know basic

facts about the detention, such as why he is being investigated.

($1 = 0.9790 euros)