Biotechnology
China has significantly bolstered its biotechnology sector, prioritizing it in three of the seven cutting-edge science and technology fields in its 14th Five-Year Plan (2021-2025): brain science, genetic engineering, and clinical medicine. Biotech is also crucial to global development goals, particularly in public health, sustainable energy, and food security.
With sizeable domestic support, Chinese companies such as BGI (genome research), Beigene (anti-cancer drugs), Mindray (medical equipment) and WuXi Apptec (services and equipment for drug development) have risen to global prominence.
ChemChina took over Syngenta, the world’s third largest seed producer, in 2017. China is the world’s largest exporter of Active Pharmaceutical Ingredients (APIs).
International collaboration and competition in biotech are intricately intertwined. China participates in roughly a third of the world’s multiregional clinical trials – only the US participates in more. China has also welcomed large investments by multinational pharmaceutical companies in domestic startups. At the same time, fair competition and market access remain a problem for many foreign firms in the healthcare sector, as localization efforts give domestic firms preferential treatment.
Great power competition adds further complexity. China, the US, and Europe all scrutinize the sharing of sensitive genetic and medical data. They also race for supremacy in dual-use technologies, such as brain-computer interfaces, which could be used for military robots.
Graphics dashboard
China has overtaken Europe in biotech patents
While the US is still the unchallenged leader, China has rapidly increased its number of invention patents over the last 20 years. It overtook the EU in 2021. China’s rise in global patent applications is consistent with increased interest from overseas investors in its biotech startups. In pharma, Chinese firms are getting increasingly successful in discovering me-too, me-better and more recently first-in-class drugs.
Chinese biotech companies make their major income abroad
Several major Chinese biotech companies rely on the overseas market for their revenue, sometimes for over 80 percent. The decline of BGI’s overseas revenue share is likely associated with its addition to the US “entity list” in 2020. Only Jiangsu Hengrui generates almost all its revenue on the Chinese market. The company has partnerships with Merck and other foreign firms to jointly develop drugs, but does not directly export to overseas clients.
China’s biotech leaders have limited R&D budgets
Chinese biotech companies have much smaller R&D budgets than their international counterparts. The gap remains significant even if the relative affordability of clinical trials and other R&D in China is considered. The disparity gives international firms an advantage in negotiating deals, as Chinese firms need the investment for the costly later stages of development. Beijing will seek to gradually change this dynamic by nurturing larger firms and encouraging them to increase R&D outlays.
Biotechnology in China: Timeline of crucial events
Development
Policy/regulation
Corporate/finance
China approves its first COVID-19 vaccine for general public use, developed by state-backed pharmaceutical giant Sinopharm and the Pfizer/BioNTech vaccine was approved for use in the EU.
Chinese medical device company Mindray Bio-Medical Electronics acquires Finnish biotech company HyTest Invest and its subsidiaries for EUR 532 million.
Leading Chinese medical imaging firm United Imaging invests EUR 410 million in a new manufacturing and research facility in Shanghai to rely heavily on automatic and intelligent processes.
The National Development and Reform Commission releases the 14th Five-Year Plan for the bioeconomy, covering life sciences and biotechnologies and calling for more investment in basic research.
MIIT calls for companies to participate in a new biomedical materials innovation program to increase collaborative innovation with a focus on polymer, metal and inorganic non-metallic materials.
MOST issues clarifying rules on human genetic resources, preventing foreign entities from collecting resources in China and restricting their access to them.
AstraZeneca acquired Gracell Biotechnologies for USD 1.2 billion, marking the first time a multinational drugmaker fully acquires a Chinese biotech firm.
The National Healthcare Security Administration aims to enhance coordination between local governments on centralized or volume-based procurement (high volume, low cost purchase of pharmaceuticals).
MIIT issues procurement guidelines, placing restrictions on a wide range of medical equipment, also X-ray machines, MRI & surgical equipment. The rules require 25, 50, 75 or 100 percent local content.
MIIT releases Five-Year Plans for the medical equipment & pharma industries, to ensure basic supplies & improve the industrial chain, enhance pharma innovation, modernization, & supply security 2025.
Chinese healthcare companies such as Andon Health and Beijing Hotgen Biotech see revenue surge thanks primarily to overseas sales of COVID-19 home testing kits.
Fosun Pharma and Genuine Biotech win the right to market the first China-made oral Covid-19 drug. The EU approved the first oral COVID-19 antiviral treatment, Pfizer’s drug Paxlovid, in January 2022.
MIIT releases a three-year plan to develop China’s non-food bio-based materials industry. By 2025, it aims for strong innovation capabilities to broaden its circular economy & reduce carbon emission.
Neusoft Medical launches China's first dual-energy 3.0T magnetic resonance imaging system. Chinese firms can make systems between 1.5T to 3.0T (magnetic field strengths) using only domestic inputs.
Caixin reports: China's outbound deals involving treatment rights exceeded inbound deals for the first time in 2023. Other parties can use a company’s products, technology or intellectual property.
Recent developments
Tech progress
- Chinese scientists have made brain-computer co-evolution possible for the first time. Researchers from Tianjin University and Tsinghua University's Integrated Circuit Institute have developed a non-invasive brain-machine interface that „learns“ and improves in use. In principle this could enable flying a drone through thought, although practical applications are likely years away (Source (EN), SCMP, 19.02.2025 and CSET, 17.02.2025)
Domestic dynamics
- While China’s synthetic biology industry benefits from market scale and industrial capacity, challenges include reliance on US materials, slow commercialization, quantity over quality in patents, talent shortages, and immature regulations. (Source (EN): CSET, 21.01.2025)
- After doctors in Shanghai voiced concerns over the efficacy of some drugs, the National Healthcare Security Administration (NHSA) announced in January that it would review the country's volume-based procurement program. The primary objective of the program is to maintain affordable prices, aligning with the needs of an aging population. No significant changes are anticipated. (Source (CN): CCTV, 20.01.2025)
- China’s healthcare insurance subsidy will be increased by 30 to 700 CNY per person, according to the Government Work Report for 2025. Such a marginal increase is unlikely to boost the domestic market for innovative drugs. (Source (CN): Economic Observer, 11.03.2025)
Foreign involvement
- China has added the California-based genomic sequencing firm Illumina to its “unreliable entities list.” The US had already blacklisted Chinese company BGI and its subsidiaries. Illumina’s market share in China had already declined from 59 percent in 2020 to 27 percent in 2024. Whereas in other industries China welcomes foreign competition to keep domestic frontrunners sharp, the latest move shows that in gene sequencing Beijing is confident in domestic capabilities. (Source (CN): MOFCOM, 06.02.2025)
- China’s WuXi Biologics announced it will sell its vaccine manufacturing facility in Ireland to Merck, anticipating restrictions by the US, especially if the BIOSECURE Act becomes law. The move, which follows the sale by WuXi Apptec of its overseas cell and gene therapy business, suggest that Chinese companies are preparing for de-coupling in biotechnology. (Source (CN): Economic Observer, 07.01.2025 and (CN): First Economics Net, 25.12.2024)
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