The takeaways
China’s biotech market is valued at $133 billion and is projected to reach $218 billion by 2034.
Proprietary drugs are on the rise, with about one-quarter of innovative drug candidates under active development originating in China.
Key opportunities for firms in the industry lie in leveraging China as a co-innovation hub while maintaining strong regulatory, data, and IP safeguards.
Lizzi C. Lee is a fellow on the Chinese economy at the Asia Society Policy Institute’s Center for China Analysis. An economist turned journalist, she holds a Ph.D. in economics from MIT and has reported on China’s business and technology, including as host of The Signal Live with Lizzi Lee.
Huiyan Li is a research assistant under the econ and tech pillar at ASPI’s Center for China Analysis, focusing on China’s biotech development and its talent and innovation ecosystem.
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China’s rise in artificial intelligence and electric vehicles has dominated headlines over the past two years — but another transformation is quietly unfolding in biotechnology, with China emerging as a global contender.
For decades, China was known primarily as a producer of generics, chemically equivalent copies of patented drugs, as opposed to proprietary drugs which are developed and patented by the originating company. Chinese firms are increasingly embedded in global pharmaceutical pipelines, developing globally competitive drugs, biologics, and cell and gene therapies in a $133 billion market projected to reach $218 billion by 2034, according to IMARC Group.
This week, Lee and Li break down what has driven China’s biotech growth, its expanding global relevance, and the biggest risks ahead as competition intensifies.
Generic to Proprietary
Between 2005 and 2007, as many as 93% of all anti-cancer drugs approved in China were generics. By 2021, that share had fallen to 61.5%, while new drugs rose from 5% to 33.5%. Today, about a quarter of innovative drug candidates now under active development originate from China, reflecting the country’s growing capabilities in original drug discovery.
Homegrown firms are bleeding into the cutting edge. In oncology, the most active field in Chinese biotech, a wave of immunotherapy drugs have gained global traction:
In 2023, Junshi Biosciences’ Toripalimab (Loqtorzi) became the first immune‑oncology drug approved by the United States Federal Drug Administration for nasopharyngeal cancer.
The same year, Akeso’s Cadonilimab became the first PD‑1/CTLA‑4 bispecific antibody to receive global approval for cervical cancer.
Cell and gene therapy tell a similar story:
Cilta‑cel (CARVYKTI), developed by Legend Biotech in partnership with Johnson & Johnson, became the first BCMA-targeted CAR-T approved for multiple myeloma (a cancer of the plasma cells) in 2022.
This represents a broader trend in which China’s biotech sector has now surpassed the European Union to become the second-largest new drug developer, closing the gap with the long-leading United States:
In 2024, China accounted for 20% of drugs in development globally, representing four of the top 25 pharmaceutical companies in terms of Research and Development.
By 2024, the country’s clinical trial volumes matched 80% of those in the US, and exceeded those in Europe by 10%.
China’s biotech boom is also showing up in Hong Kong’s capital markets, which have become a primary offshore financing hub for Chinese drug developers. As of June 2025, the market capitalization of Hong Kong’s listed health-care sector reached $441 billion, triple the $144 billion recorded at the end of 2017. Hong Kong’s Hang Seng Biotech Index rose over 80% for the year, outpacing broader Chinese tech and AI sectors. Hong Kong’s initial public offering market, a key venue for biotech listings, regained prominence after a prolonged post-COVID dip, leading the world in IPO fundraising in the first half of 2025.
While the surge was driven by mega-deals across multiple sectors, biotech offerings were especially strong: Four of the 10 most oversubscribed Hong Kong IPOs in the first three quarters of 2025 were biotech companies. Metabolic-disease drug developer Innogen ranked third, with subscriptions exceeding 5,300 times the shares offered.
WHAT’S BEHIND THE BIOTECH BOOM?
The explosion of Chinese biotech, which may have been surprising or mysterious to outsiders, represents a long-time-coming convergence of structural advantages on the mainland, such as:
Long-term policy design
For years, biotech has been a government-designated, strategic emerging industry, embedded in the Healthy China 2030 blueprint aimed at dealing with a rapidly aging population, a commitment that has translated into tangible support like financial subsidies, R&D tax incentives, and streamlined regulatory pathways to accelerate drug development.
China has also reformed its national reimbursement and procurement systems by lowering prices and procurement volumes for generics, freeing resources to support innovative therapies and pushing companies toward more high-value R&D.
Scale & efficiency across the value chain
On the manufacturing front, China leads the global market for Active Pharmaceutical Ingredients, holding dominant shares in key categories like analgesics, antipyretics and antibiotics, reflecting decades of investment in chemical production, logistics networks, and export-focused industrial clusters.
Critical to this trajectory is the R&D speed, enabled by China’s vast clinical trial resources. Since the State Council’s 2015 regulatory reforms, China has been able to initiate trials quickly and recruit patients at scale.
Large, concentrated patient populations, especially in oncology, allow for much faster enrollment, sharply reducing development timelines and cost. This speed has become a decisive advantage in bringing new therapies to market.
Outsourcing platforms and talent
Underpinning China’s biotech boom are contract research organizations and contract development and manufacturing organizations, like WuXi AppTec, platforms handling everything from early-stage experiments to clinical-trial support and large-scale drug manufacturing, which allows biotech companies to outsource much R&D and production.
As global pharmaceutical companies confront looming patent cliffs, reliance on Chinese CROs and CDMOs has only deepened, and this cost-efficient infrastructure is further reinforced by talent: China now produces over 4.7 million STEM graduates annually, more than the US and Europe combined. Add to this a wave of US-trained scientists returning home following trade-war protectionist policies by the Trump administration.
AI is becoming biotech’s next multiplier
A 2024 WIPO report shows China filed 38,000 generative AI patents from 2014 to 2023, six times more than the US, with a significant portion in life sciences and drug discovery. While the US still leads in granted AI-driven drug-discovery patents, China’s application volume suggests it is catching up, a surge already translating into real-world applications, putting several Chinese companies out front:
XTalPi leverages AI, quantum physics, and robotics to accelerate drug discovery, collaborating with Pfizer and many of the world’s top-20 global pharma firms.
CarbonSilicon is attracting attention for AI tools that help researchers find promising drug candidates and prepare proteins and molecules for testing.
Beyond digital models, China is pushing ahead in embodied AI for biotechnology that integrates AI with physical laboratory infrastructure. In systems like BioMARS, developed at the University of Science and Technology of China, AI models design experiments, control lab robots, and manage quality checks, feeding back data in near-real-time.
THE RISKS
Homogenization
China’s innovative drug sector is increasingly homogeneous. Over the past decade, the top 20 drug targets in China’s new-drug pipeline attracted 716 Investigational New Drug filings, accounting for nearly 29% of all submissions. In 2019, 70% of clinical-stage innovative drugs clustered around just 21% of targets. Crowded fields such as cell therapies exhibit heavy duplication, limiting differentiated, first-in-class candidates.
This competition fuels price wars that undermine the profitability required to sustain future R&D. Negotiations around the National Reimbursement Drug List further squeezed margins: in the 2024 cycle, the average discount on listed drugs in China reached as high as 63%.
Geopolitics
Chinese firms became embedded in global pharma chains in part because China’s capital markets lack the kind of ultra-long-term, failure-tolerant capital available in the US. As a result, many companies license out global rights to their early-stage assets, which has deepened US reliance on China for APIs and critical manufacturing segments.
Some estimates suggest as much as 80% of US API imports originate in China, a dependence that has triggered political pushback in Washington, DC. Initiatives such as the BIOSECURE Act, enacted in December 2025, targeting several CROs and CDMOs, reflect a broader shift toward framing biotech as a national-security issue in the US.
At the same time, Beijing has asked state-owned drugmakers to cut reliance on the US for drugs and raw materials and prioritize domestic products in government procurement. Some policy advisors have even begun discussing the creation of a “closed loop” of domestic CROs, CDMOs, regulators, health insurers, and capital. But China’s biotech systems are far more dependent on global knowledge flows to make that viable, and far too essential to human health to remain isolated under the guise of nationalism.
A Strategic Crossroads
Chinese biotech, with all its strengths of speed, scale, cost efficiency, talent, and AI, have been indispensable to global pharmaceutical innovation. But these advantages leave it exposed to involutionary price competition at home, and growing geopolitical pressure in a fragmenting world economy.
Long-term growth still requires continued access to Western capital markets that provide patient, failure-tolerant funding, ongoing participation in global knowledge flows, multinational clinical development, and international regulatory frameworks.
How this balance is struck will shape more than the future of China’s biotech and thestructure of global pharmaceutical supply chains
Opportunities and Strategic Paths for Global and Domestic Firms
For international pharmaceutical companies, China is evolving from a sales market and manufacturing base into a co-innovation hub. Partnerships with Chinese biotech — through licensing and joint development — are becoming central to reinforcing global innovation strategies as firms face looming patent cliffs and pressure to replenish pipelines more efficiently.
For Chinese companies, the imperative is to move beyond crowded therapeutic areas toward differentiated, first-in-class innovation. Recent policy signals favor breakthrough drugs and discourage duplication, with regulations increasingly tied to clinical value. New exclusivity rules — including up to seven years of protection for eligible rare-disease therapies — strengthen incentives to pursue novel targets aligned with China’s demographic needs.
At the industry level, China is best understood as a key node in a global innovation network. Progress in biosciences depends on openness and cross-border collaboration in clinical research, data, and drug development.
That engagement, however, must be paired with clear guardrails: regulatory awareness, strong data security practices, and robust intellectual property protections. Sustained cooperation between trusted partners — grounded in openness but shaped by vigilance — will be critical to ensuring new therapies reach patients worldwide.
Authors Lizzi C. Lee and Huiyan Li are available through Nüora Global Advisors for bespoke analysis and research engagements. Edited by Dave Besseling, a Hong Kong–based guest media consultant to Nüora. Read Lee’s article in Nature, “China’s biotech boom: Why the nation must collaborate to stay ahead.”