This page is not available in your selected language. Your language preference will not be changed but the contents of this page will be shown in English.

To change your current location please select from one of Julius Baer’s locations below. Alternatively if your location is not listed please select international.


Please select
Additional e-Services

*The location identified is an approximation based on your IP address and does not necessarily correspond to your citizenship or place of domicile.


Sign up for Insights newsletter


Sign up for Insights newsletter

China: Tomorrow’s biotech champions are in the making today

As a Chinese proverb says, “A journey of a thousand miles begins with one single step”. In the case of China, although the country’s biotech industry is still in the early stages of development as compared to the United States and some European countries, we believe that tomorrow’s biotech champions are in the making today. This development will undoubtedly have ramifications for investment opportunities, global politics, and society as a whole. Dr. Damien Ng, Next Generation Research Analyst, tells us more.




In the last decade, around 80% of Chinese scientists living abroad have returned home due to the lure of attractive incentives and the US-China trade conflict. The return of these overseas-trained Chinese talents, also known as ’sea turtles’ (or ’Haigui’ in Mandarin), has the effect of boosting increasingly high-impact research output, as reflected in the Nature Index 2020 published by the British weekly scientific journal, ‘Nature’. By tracking papers published in 82 high-quality natural science journals, which are chosen by an independent group of researchers, the Nature Index can gauge the global high-quality research output and cooperation among institutions and countries.

The Nature Index 2020 Top Ten Country List
According to the assessment, the United States remains the world’s most prolific producer of output in natural sciences. Nevertheless, the gap between the United States and the country ranked second in the evaluation, China, is constantly shrinking. While China’s research output in the discipline has risen by nearly 60% since 2015, which is the fastest growing country in the world, the United States’ share fell by 10% during the same period. The other countries that have also made it to the world’s top-ten list are Germany, the United Kingdom, Japan, France, Canada, Switzerland, South Korea, and Australia. In the category of life sciences, the latest data from ‘Nature’ reveals that the United States and the United Kingdom continue to lead the world in terms of their research output in the discipline.

While China is hot on the heels of the United Kingdom, it has also been identified by the British weekly scientific journal as the world’s major rising country in the field of life sciences due to the 66% increase in its share of global research output in the subject between 2015 and 2019. The other top-ten countries include Germany, Japan, France, Canada, Australia, Switzerland, and the Netherlands. On an institutional level, Chinese institutions represent eight of the ten fastest rising institutions in life sciences, with Zhejiang University and the University of Chinese Academic Sciences taking the two top spots. This compares with the University of Oxford and the Swiss Federal Institute of Technology Zurich, which are ranked seventh and eighth, respectively.

The SCImago Journal & Country Rank offers a new perspective
When attention shifts to the category of biotechnology, the database of a publicly available scientific portal, SCImago Journal & Country Rank, reveals a different scenario. SCImago is an online resource that aims to measure the scientific influence of scholarly journals (like ‘Nature’) by taking into consideration the number of citations received by these journals and the importance of the journals where the citations come from.

Drawn from Scopus, a scholarly research database, citation data includes over 34,000 titles from more than 5,000 international publishers and country performance metrics from over 230 countries worldwide. According to the assessment, China has overtaken the United States to become the world’s most productive nation in terms of the number of biotech research publications (see chart above). However, if focus shifts to the number of citations per paper (a commonly used metric in the scientific community to quantitatively evaluate the impact, quality, and significance of published research), China is still lagging behind the United States, although it is rapidly narrowing the gap.

Transforming the Chinese healthcare sector
For the past three decades, biotech companies across the globe have viewed the United States as the most lucrative and largest pharmaceutical market on the planet. With the world’s leading drug regulatory agency, the US Food and Drug Administration (FDA), and a reimbursement system that covers nearly USD 480 billion worth of drug sales for its 328 million consumers per annum, the United States has reigned and continues to be an important base for global companies to launch their biopharmaceutical products.

Until a few years ago, the difference between the biopharma market in the United States and China could not have been starker. The pharmaceutical market in the world’s second-largest economy had been dominated primarily by low-cost generic drugs that are copies of branded drugs, a rigid regulatory and reimbursement system, and a creaking healthcare system that was ill prepared to serve its 1.4 billion citizens. However, recent government reforms, substantial private and public investments, as well as returning expatriates have transformed the Chinese healthcare sector into the world’s second-largest biopharmaceutical market worth USD 140 billion. The next two large pharmaceutical markets can be found in Japan and Germany, which are valued at USD 80 billion and USD 50 billion, respectively.

Not only does the world’s most populous country account for a quarter of the earth’s diabetic population, but it is also confronted with the onset of infectious diseases, like the rising prevalence of hepatitis C among 9 million of its citizens. In other words, China has the urgency and self-interest to strengthen its healthcare system by making greater investments in genomics. Taking this into consideration, Chinese companies are likely to put their near-term focus on the unmet needs of their country’s ageing population and the rising incidence of chronic diseases.

The future of the global biopharmaceutical market
At the same time, their gaze is beginning to look beyond their shores. Chinese biotech companies are actively involved in activities relating to mergers and acquisitions (M&A) and venture capital (VC) abroad, largely in the United States and the European Union, and to smaller extent in Singapore and Australia. This will have a profound impact on the future of the global biopharmaceutical market in terms of investment opportunities, medicine, science, global politics, as well as the competition between China and the US.

While inbound investments into China have been increasing over the years, outbound Chinese investments have been comparatively gaining pace more rapidly. In other words, acquiring know-how is one of the major elements of China’s biotechnology growth and strategy to catch up with its peers. While 3% of Chinese outbound investments are state-sponsored, the rest are overwhelmingly from private Chinese companies. In addition, over three-quarters of its investments are in the realm of biologics, with the remaining in genomics, molecular diagnostics, and precision medicine. The first shoots of home-grown drug discovery and development are emerging. For example, a therapy based on seaweed has been approved by local authorities to treat patients with mild to moderate Alzheimer’s disease.

Would you like to know more about thematic investing and which megatrends should be reflected in your portfolio?

> Contact us