China — irresistible market for pharma MNCs

With investment sentiment subdued globally, China's policies to attract and encourage foreign investment, including in the pharmaceutical, healthcare and related industries, have proved timely, experts said.

In August, the State Council, China's Cabinet, released a set of guidelines on further optimizing the foreign investment environment and attracting offshore capital. The guidelines included several provisions related to the pharmaceutical industry, such as encouraging foreign-invested enterprises that have been listed overseas already to conduct clinical trials of cell and gene therapies on the Chinese mainland.

"We believe those measures, if implemented strictly, will help improve foreign investor confidence in China, prompting more domestic-sales-focused foreign companies, including pharmaceutical companies, to continue to invest in China," Zhu of Fitch Ratings said.

"The Chinese government's continued support for drug innovation and a policy environment conducive to the discovery of new drugs will also benefit foreign pharmaceutical companies operating in China," she said.

Zhou Mi, a senior researcher at the Chinese Academy of International Trade and Economic Cooperation, said China is becoming increasingly attractive to global pharmaceutical investors because they are confident of achieving stable and long-term growth in this market.

"China has a huge market that is expanding fast, which provides a firm ground for global pharmaceutical companies to increase their profitability.

"Besides, as the country expands market access and levels the playing field for all types of enterprises, they could respond more effectively to market demand in China to achieve long-term and stable development," Zhou said.