Enter the dragon: Exploring China’s life sciences market
The BIA and Department of Business and Trade (DBT) in China are delivering a BIA China Special Interest Group webinar on a China Outlook in 2024 on 5th March. In this blog, Rahul Agarwal, DBT Counsellor for Life Sciences & Healthcare at the British Embassy Beijing, gives a taster of the current Post-COVID landscape in China and opportunities for UK companies.
New Year, new discoveries
Next week, Chinese people across the world will be celebrating Chinese New Year. This is the “year of the dragon”, a symbol of strength for the Chinese people. It also represents prosperity, a value Chinese strive for across aspects of life, society and business.
It is well accepted that the Chinese market was hit during COVID and global business links disconnected especially with travel restrictions. However, the China biopharma innovation ecosystem showed signs of resilience and the market has now had a year of re-established flights routes in a country where relationship building is key. As such many UK life science companies are re-discovering market opportunities.
China never really left:
- It is still the world’s 2nd largest economy, and the IMF indicated 5.4% growth this year having made a “strong” post-COVID recovery
- For scale, ten of its provinces have a larger population than whole of the UK
- In the four quarters to the end of Q2 2023, two-way trade between the UK and China actually grew 10.6% making China the UK’s third biggest trading partner after the US and Germany
China’s commitment to life sciences
China has similar challenges to the UK. For instance, people over age of 60 will reach 28% by 2040 and it accounts for 27% of cancer deaths worldwide. Through ‘Healthy China 2030’ China has committed to improving health outcomes for patients by capitalising on medical innovation and ensuring access to essential drugs and services.
This includes fifteen big actions including Healthy Ageing, Oncology, Cardiovascular, infectious disease and women and children’s health. At a local level, to stimulate medical reform, China has outlined 11 provinces as pilot zones for model healthcare systems.
In my last six months in post, I have seen in-person some of these regions and the impressive scale and complexity of new life science zones, innovation centres and hospitals.
Biopharma in China has accelerated innovation. Although many developments and drugs are in early stages, they show promise for the future of the industry in China and the world. China innovative drug market size will grow from $20 billion in 2022 to $50 billion in 2028.
China is making good progress in improving its life sciences institutions and related academic talent pools, but the country has work to be on par with the world’s leading seats of biopharma research.
Opportunities for UK
All of the above present opportunities for UK biopharma and biotech companies and wider institutions to partner with China. There will be significant cross border transactions taking place over the next three years. What has struck me is the warmth and genuine interest in UK life sciences from Chinese businesses and investors.
We have already seen major investment both ways. This includes Chinese company Pharmaron investing on cGMP manufacturing in multiple sites across UK. And AstraZeneca establishing the “iCampus”, an initiative to support SMEs to scale in China.
There are also opportunities for SME UK companies including exporting their solutions or attracting capital investment. However, success depends on considered “navigation” of the system.
For UK Government, as set out in the Integrated Review of 2023, the UK is pursuing, with our allies, a multifaceted approach to China through three interrelated strands: protect, align, engage.
The UK government believes a positive trade and investment relationship is beneficial for both the UK and China, where it is consistent with our values and national security.
As such, DBT has a strong, talented team based across six cities in China, including Hong Kong, ready to support UK companies with that “navigation”. We hope to share how we do that and what you need to succeed in this dynamic market in the upcoming webinar.
Long Nian Da Ji! (Happy Year of Dragon)