Article
China's Biotech Parks – Leveraging the ecosystem for success
Viewpoints / key findings
China's Biotech Parks – Leveraging the ecosystem for success presents the current development conditions of Chinese biopharmaceutical industrial parks ("BPIPs"), summarizes common local support policies, and discusses how biopharma enterprises can use industrial parks and related policies to map out entry strategies or re-improve their layouts in China.
The Chinese government has recognized the biopharmaceutical industry ("BPI") as of strategic importance and been vigorously advocating its optimum development in China. BPIPs have been one of the main contributors to the rapid development of the Chinese biopharmaceutical industry. Many local governments have established special BPIPs and issued policies to attract a growing number of domestic and multinational biopharmaceutical enterprises. Chinese BPIPs have become much more developed.
The status and development of BPIPs in China
In recent years, propelled by supportive central government policies, the capital market and a growing pool of top talent, China's biotechnology and pharmaceuticals industry has grown explosively, in tandem with the rapid development of BPIPs. According to the 14th Five-Year Plan, the Chinese government will continue to regard BPI as an emerging industry of strategic importance. Some local governments even plan to make the industry a new engine of economic growth and have released policies to promote industry development.
Overview of tax and financial supporting policies for the Chinese biopharmaceutical industry
At the national and industry level, the Chinese government has been reforming medicine, medical and medical insurance systems. A raft of regulatory changes and new policies have been introduced in recent years. At the local government level, BPIPs are at varying stages of development. Local support and incentive policies provide a broad range of benefits covering finance, fund investment, talent, and regulatory procedures. However, the amount of support depends on case-by-case discussions with local governments, the nature and size of a project and its potential benefits to the local economy.
Policy considerations for biopharma companies in China
- The most developed BPIPs are more attractive as a destination for biopharma companies. Tailored financial incentives, comprehensive support services, and reliable upstream and downstream supply chains have become the key factors in attracting investment
- Adapting to changes in the Chinese market, biopharma companies are assessing how to improve their layouts in China and reorganizing their supply chainaligned tax strategies
- Attracting and retaining core personnel is a key factor influencing the success or failure of biopharma companies' investment in China and they can leverage BPIPs' talent support policies
In line with China's economic development, the domestic BPI and BPIPs are entering a stage of high-quality growth, having already experienced rapid expansions. Local governments' emphasis on BPI, and competition to establish BPIPs with various business and local focuses, provide opportunities for biopharma companies to invest in China or improve their existing layouts to adapt to market landscape changes. They should make full use of opportunities to negotiate with governments to seek qualified financial benefits and support for their businesses with no stones unturned. They should also seize the opportunity to re-examine their local and global supply chain arrangements and leverage business re-organization plans, to establish tax aligned supply chain strategies.
