As Made-in-China products still suffer globally from the perception of being inferior knock-offs, the country has quietly made enormous progress toward enhancing its technology prowess on everything from artificial intelligence to advanced manufacturing. Ignoring China’s efforts and success on this will serve as a disadvantage to the West and a welcome blessing to China.
Let’s look at what China has achieved in healthcare technology, for example. The world could soon see the next innovative breakthrough drugs developed and made in China. Over 50 Chinese companies with world-leading drugs in their pipeline have entered or completed phase I and phase II clinical trials, while over ten companies have completed phase III trials, according to a report published by Chinese investment banking firm CEC Capital, formerly known as China eCapital Corporation.
Back in 2015, China surpassed Japan to become Asia’s largest new drug developer with 147 pharmaceutical companies engaged in drug research and development, according to data from Pharmaprojects.
The emergence of Chinese pharmaceutical companies are driven by China Food and Drug Administration (CFDA)’s policies to accelerate new drug approvals and the return of overseas-educated healthcare experts to China seeking greater opportunities.
In the red-hot field of precision medicine, China has a chance to lead the world in terms of data collection and application. Shenzhen-based genetic testing giant BGI is one of the biggest companies in non-invasive prenatal tests (NIPT). In Chimeric Antigen Receptor (CAR) T-Cell therapy, the total number of clinical trials in China is second only to the United States.
The precision medicine market in China was worth around RMB40 billion (US$5.8 billion) in 2016. The targeted drug sector, a subcategory of precision medicine currently worth RMB13 billion (US$1.89 billion), is expected to grow at over 20% annually in the next five years, according to the CEC Capital report.
China also has the world’s largest mobile healthcare app operators. Haodaifu Online, a digital healthcare company allowing patients and doctors to communicate online or in a mobile app, yesterday raised US$200 million from Tencent. The company has over 10 million registered patients, one of the largest groups of users for services like this in the world.
The digital healthcare market, an important future direction of the industry, is expected to expand to US$110 billion in 2020 in China from US$3 billion in 2014 in terms of spending on the sector, the Boston Consulting Group previously estimated.
The 36-fold growth in six years will be driven by venture investments and government support. A total of US$10.3 billion was invested in healthcare companies from 2015 to the third quarter of 2016, according to data from ChinaVenture.
The Chinese government, of course, has named healthcare as one of its top strategic priorities. In a "Health China 2030″ plan released in October 2016, Beijing set out targets to have the healthcare sector reach RMB8 trillion (US$1.16 trillion) and RMB16 trillion (US$2.3 trillion) in 2020 and 2030, respectively.
Even if China achieves its objective in 2030, its healthcare industry will still be smaller than the US$3 trillion market size in the U.S. But its technology may not be second rate by then.