China has been trying to break into the advanced pharmaceutical industry for year, and that day is now approaching. An increasing number of highly trained professionals are returning to China and more people are willing to invest in the high-end medicines industry. So how is the industry faring now?
Estimates are that 30 percent of the professionals in China's biomedical research industry are returnees from overseas, and Chen Li is one of them, one of what China calls "hai gui," or sea turtles. Chen earned a Ph.D. in the US more than twenty years ago, worked for a large medical research company there, and then helped the company set up in China.
In 2011 he struck out on his own and started a Shanghai company researching diabetes drugs. He says the under-developed state of the biomedical industry in China when he came back actually was an attraction.
"Over 95 percent of the drugs our country produced then were generics. Innovative drugs were brought into China market by multinational companies," Chen said.
"The research on new durgs was so limited that only four or five companies were doing it. Capital was scarce, and there were not many professionals in the industry. Because of the lack of all this, the needs were huge."
But things have changed. Commercial investment in China's life sciences sector totaled more than 30 billion dollars in 2015, a 70 percent increase from the previous year.
The speed of development of the industry in China has also attracted hai gui investors coming back to help capitalize medical companies like Chen's.
In 2015, 134 venture capital and private equity funds invested 3.5 billion yuan in China's medical industry, an increase of 151 percent in one year. Tan Yan returned to China at the start of this year, and he says it's just the right time to put money into China's biomedical industry.
"Compared with the United States, China's biomedical industry is under-developed. So there will be a lot of opportunities. The value of a medical research company is a long-term thing. You won't see a financial increase or a take off with these companies, but if things develop well they have a very high intrinsic value," said Tan Yan, early project investor, Free Fund.
Chinese made up almost a third of all foreign students in the U.S. in the 2014-15 school year, and 8.8 percent of them chose majors related to life sciences.Government financial aid to the industry is also one of the reasons why professionals are coming back.
"In the five years from 2004 to 2010 our professionals and our technology came from nothing. But after that the environment changed. In the past decade, the Chinese government's investment in basic science and the life sciences has been huge. We are different from the United States in that the government invests directly in new drug research projects," Chen Li said.
China's biomedical industry has seen steady growth from 2010 to 2015, with total revenue reaching some 200 billion yuan. The government's 13th five-year-plan calls for breakthroughs in 10 to 20 core biomedical technologies, and China's "haigui" are at the center of the effort.