Chinese Biotech Companies In the early 2000s, Western biotech companies looked to China for cheap labor and raw materials, but today China’s political and economic climate is more open, and the country’s large biotech talent pool is attracting more attention. A key year for China’s biotech industry was 2007, when the government introduced new regulations aimed at streamlining regulatory processes, strengthening surveillance of pharmaceutical companies, and encouraging innovation. In 2008, the government implemented new rules related to drug registration, labeling, and recalls. The industry in China is at a crossroads. It has many critical elements that support innovation and commercialization, including a world-class university system that produces doctors with strong basic research backgrounds, substantial government and private sector funding, and increasingly harmonized regulations. And, of course, Chinese biotech entrepreneurs have big plans for the country. However, these developments will require a lot of hard work. For now, there is a steep learning curve before Chinese biotech companies can reach their full potential. While Chinese biotech companies must work to build their domestic capabilities and expand beyond China, their ambitions are high. The Chinese government has already designated biotech as a “strategic emerging industry.” The government also prioritized the industry in its “Made in China 2025” plan, which calls for state support and MCF plans. Moreover, BGI has been at the center of these efforts. The company has received state subsidies of at least $1.5 billion, and has bought several American firms to take advantage of this state subsidy. In addition, the Chinese government has pushed biotech into a niche in the global market, which is a key factor in increasing health care costs in the country. While Chinese biotech companies lag behind European and U.S. biotech firms, international collaboration is advancing. Out-license deals between Chinese biotech companies and major Western pharmaceutical and biopharmaceutical firms are increasing, while domestic Chinese biotech players are using in-licensing to boost exports to the mainstream market. An investor with a thorough knowledge of China’s biotech industry will be well-positioned to reap the rewards. One reason for the slowdown in the biotech industry is that IPOs are often a way for biotech companies to raise capital, but that makes it difficult to sustain a sustainable growth. It also limits the ability of the Chinese biotech sector to make discoveries. By focusing on in-licensing, biotech firms can increase their profits and diversify their portfolios. If they are able to increase their patents, they can also expand their international markets. Chinese biotech companies are growing fast. In addition to being a global player, Chinese biotech firms are increasingly exporting technology to the U.S., where they are making the most money. Despite the lack of foreign investors, these companies also benefit from the country’s large population. A recent study by Oxford University found that 95% of Chinese biotech firms produce vaccines and blood derivatives. A new Chinese firm with more than 9,000 employees is poised to be the next big biotech company in the world. While China’s biotech industry is growing rapidly, there are still barriers to commercialization. The IPO is an exit strategy that is more convenient to investors than real-world profits. But the Chinese biotech industry is still young and the market is still dominated by multinational companies. For example, the Beijing-based Zai Lab has acquired Complete Genomics, a company that holds genetic information of U.S. citizens. The company has also invested in a number of U.S.-based biotech firms. The government’s policies are encouraging Chinese biotech companies to pursue innovative ideas, but the industry faces challenges. The government’s policy is supportive of biotechnology, but the country has yet to meet its standards. Among the most prominent examples are the Beijing Genomics Institute and Beijing-based I-Mab. These firms are working on a wide range of promising projects. These companies should also seek to enter the WTO. The Chinese economy is now the world’s largest market, and the United States will benefit from this growth. The country’s policies have also encouraged a number of biotech companies to compete with foreign companies. The recent RemeGen deal with AbbVie has been a milestone for Chinese biotech. In the past, it has been one of the most important deals in the industry. With the deal, Chinese biotech companies are seeking to make their products competitive. In addition to partnering with Western firms, Chinese biotech firms are expanding their product pipelines.