China’s biotechnology sector has emerged as a formidable force, shaking off a four-year slump to become one of Asia’s hottest markets. The Hang Seng Biotech Index has surged by approximately 60% in 2025, a rally that has outstripped the 17% gain in China’s tech stocks, driven by the release of DeepSeek’s breakthrough artificial-intelligence model in January. This phenomenon, dubbed the “DeepSeek moment” for biotech, reflects China’s growing prowess in innovation, positioning the country as a global contender in drug development and biotechnology. The sector’s rise is underpinned by significant financial investments, strategic partnerships with global pharmaceutical giants, and a robust pipeline of innovative drugs, particularly in oncology.

The term “DeepSeek moment” draws from the success of DeepSeek’s R1 artificial-intelligence model, which propelled the Chinese AI startup to global prominence earlier this year. In biotech, this analogy captures the sector’s rapid ascent and its potential to disrupt global markets. “China biotech is no longer just an emerging story — unlike 10 years ago — it is now a disruptive force reshaping global drug innovation,” Yiqi Liu, senior investment analyst at Exome Asset Management LLC in New York told Bloomberg. This sentiment is echoed in the flurry of high-value licensing deals and initial public offerings (IPOs) that have invigorated investor confidence.

A notable example is the performance of companies like Akeso, a Chinese drug developer that has seen its shares climb 6.5 times their IPO price from five years ago, despite a temporary 11.8% drop following a second marketing IP for its lung cancer drug ivonescimab in April 2025. Ivonescimab, a bispecific antibody, has outperformed Merck’s blockbuster drug Keytruda in phase three trials, marking a significant milestone. “The development of the new antibody drug was hailed by the mainland media last month as the biotech industry’s ‘DeepSeek moment’,” reported the South China Morning Post, highlighting the drug’s potential to challenge global oncology standards. Akeso’s partnership with Summit Therapeutics in the US to advance ivonescimab’s clinical trials across 108 locations in 12 nations underscores China’s ambition to compete on the global stage.

The financial momentum is equally striking. In May 2025, eight licensing deals were reached in China’s biopharma sector, with five cross-border out-licensing agreements generating over £1 billion upfront and a potential £6.5 billion including milestones, according to posts on X. This represents a significant increase from April 2025, which saw six deals with £141 million upfront and £2.35 billion in total potential value. These figures reflect a growing appetite among global pharmaceutical companies for Chinese-developed drugs. For instance, Bristol-Myers Squibb agreed to pay Germany’s BioNTech SE up to £8.45 billion to license a cancer drug originally developed by China’s Biotheus Inc, which BioNTech had acquired for £590 million in 2023. Such deals highlight the economic allure of China’s biotech innovations.

Investor enthusiasm is further evidenced by the performance of recent IPOs. Shares of Duality Biotherapeutics Inc, a company focused on cancer treatments, more than doubled on their first day of trading in Hong Kong on 15 April 2025. Similarly, companies like 3SBio and RemeGen Co. have seen stratospheric gains, with 3SBio surging 283% and RemeGen climbing over 270% after announcing potential licensing deals with multinational firms. “Chinese biotech companies are having ‘their own DeepSeek moment’,” said Dong Chen, chief Asia strategist at Pictet Wealth Management in Hong Kong, pointing to the sector’s ability to attract significant capital and deliver promising pipelines.

The role of venture capital is pivotal in this transformation. Hong Kong-based ORI Capital is planning a £260 million fund to invest in Chinese healthcare startups, capitalising on the sector’s momentum. “Hong Kong-based venture capital firm ORI Capital plans to launch a new fund to invest in Chinese healthcare start-ups, as the domestic biotechnology industry experiences its own ‘DeepSeek moment’,” noted Simone Song, the firm’s founder, in an interview with the South China Morning Post. The fund aims to leverage artificial intelligence to enhance drug development, reflecting the integration of cutting-edge technologies in biotech innovation.

China’s biotech sector is not without challenges. The development of drugs like ivonescimab remains uncertain, with many candidates still in preclinical or early clinical stages, requiring years and hundreds of millions of dollars to reach market approval. Approximately 90% of compounds entering human trials fail, a reality that tempers optimism. Moreover, geopolitical tensions and US concerns about China’s biotech dominance add complexity. A US congressional report warned that “China is quickly ascending to biotechnology dominance,” urging Congress to invest £11 billion over five years to bolster US biotech, including £890 million through the Defence Department for applications like shelf-stable blood and advanced explosives. The report highlighted fears that China’s advances could have national security implications, potentially complicating cross-border collaborations.

Despite these hurdles, China’s biotech sector is capitalising on its domestic strengths. Companies like Innovent Biologics are accelerating clinical development, producing six to eight assets annually and maintaining a robust pipeline of clinical-stage drugs. “We are developing at a very fast speed and to demonstrate a clinical concept and derisking it,” a representative from Innovent told Bloomberg, emphasising the “China speed” in research and clinical trials. This efficiency, combined with substantial financial reserves (Akeso, for example, held 7.34 billion RMB in cash at the end of 2024) enables sustained innovation.

The global implications of China’s biotech rise are profound. The sector’s ability to produce cost-effective, innovative drugs is attracting Big Pharma, as seen in Merck & Co’s £82 million upfront deal with Hansoh Pharma to develop an obesity drug, with potential milestones up to £1.4 billion. Such partnerships signal a shift in the global pharmaceutical landscape, with China transitioning from a manufacturing hub to a centre of innovation. “The surge in China-listed biotech firms is further evidence that the mainland is becoming a centre for global innovation,” noted a Bloomberg report, underscoring the sector’s competitive edge.

The integration of artificial intelligence is another driver of this transformation. AI is being used to streamline drug discovery and optimise clinical trials, reducing costs and timelines. This technological synergy is particularly appealing to investors, as evidenced by ORI Capital’s AI-focused fund. The combination of biotech and AI is not only enhancing China’s domestic capabilities but also positioning its companies to compete with Western giants like Merck and Bristol-Myers Squibb.

The competitive landscape is also shaped by China’s regulatory environment, which has become more conducive to innovation. The approval of ivonescimab by China’s National Medical Products Administration (NMPA) in April 2025 for two indications demonstrates regulatory agility, contrasting with the longer timelines in markets like the US, where the drug remains in clinical trials. This regulatory efficiency, coupled with China’s large patient population for clinical studies, provides a strategic advantage.

As China’s biotech sector continues to mature, its global influence is undeniable. The success of companies like Akeso, Innovent, and Duality Biotherapeutics reflects a broader trend of Chinese firms moving beyond generic drug production to pioneering novel therapies. The financial backing from venture capital, coupled with strategic partnerships with global players, ensures that this momentum is likely to persist. However, the sector must navigate the complexities of global regulatory frameworks and geopolitical scrutiny to sustain its trajectory.

The “DeepSeek moment” for China’s biotech sector is more than a fleeting rally; it signals a structural shift in global innovation. With a combination of financial strength, technological integration, and strategic partnerships, China is redefining its role in the biotechnology landscape, challenging Western dominance and setting the stage for a new era of drug development.

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Against a backdrop of China’s rapid economic growth, sharp increases in funding, improvements in medical outcomes and evolving demographics, the Chinese healthcare and pharmaceuticals markets have seen rapid advances over the past decade.

Learn more about UK-China collaboration in healthcare and biosciences at the UK-China Business Forum 2024 on 20 March. Click here to register

China’s healthcare market is now the second-largest in the world. Total revenue was estimated to be around RMB 10 trillion (approx. £1.09 trillion) in 2021, and the “Healthy China 2030” initiative, one of the government’s main blueprints for developing the healthcare industry, has set out an aim for the market to reach RMB 16 trillion (approx. £1.75 trillion) by 2030.

This growth, along with China’s sophisticated digital infrastructure, has laid a fertile ground for innovation in healthcare and life sciences.

The UK has a unique health and life sciences ecosystem, and its track record of scientific breakthroughs serves as a driving force for the next generation of life-changing treatments, technologies and services. Recent developments in China’s healthcare sector, including newly published regulations in central procurement and public hospital reform, have made the international business environment even more competitive for international businesses operating in healthcare and the life sciences. Despite growing competition internationally, the UK maintains a competitive position in China’s healthcare cooperation agenda.

The challenges facing the healthcare sector in China provide many potential opportunities for UK organisations. For example, China’s rapidly ageing population will need to be supported by innovative pharmaceutical and biotech solutions, as well as robotics and AI. Sales of home healthcare devices for older adults have already shown an increase during Singles’ Day in recent years, as have sales of dietary supplements and cosmetics with ‘anti-ageing’ properties. Indeed, many experts recommend that the best solutions to the problems of ageing are found much earlier in life, creating a need for innovative products that prevent chronic illness caused by environmental and lifestyle issues.

It is for this reason that, over the past decade, UK-China collaboration in healthcare has received unprecedented support from both governments, as well as leading companies in the industry. For example, in 2017, GlaxoSmithKline (GSK) and the British Council launched the UK-China Health and Economy Partnership, a higher education programme to promote knowledge sharing and research innovation in health economics between leading British and Chinese experts and institutions.

During the UK-China Business Forum 2024, a panel of experts will discuss how UK businesses are innovating and partnering in the Chinese market and how competition is driving healthcare forward in one of the world’s most dynamic economies. The panel includes Mark Hedley, Deputy Head of Investment Promotion at InvestHK; Sue Welburn, Vice Principal of Global Access & Professor of Medical & Veterinary Molecular Epidemiology at the University of Edinburgh; and Elinor Greenhouse, Senior Adviser, Tech and Innovation at the China-Britain Business Council (moderator). Click here to register.

Photo by National Cancer Institute on Unsplash

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In 1874, the sooty streets of Manchester housed nearly half a million. The booming textile industry had turned this once sleepy market town into the workshop of the world. Gaslit streets illuminated world-weary travellers hustling their wares between mills and traders. Among them was a man who had recently returned from China, where he had been buying silk to sell to the wealthy mills’ owners of Manchester. It’s unclear how close this 19th-century trader managed to get to the halls of imperial China’s power base but one day, nearly 150 years later, his descendent would be received in China’s Great Hall of the People by the country’s Prime Minister himself.

Simon Haworth is the great, great-grandson of one of the silk traders that used to navigate China’s ancient silk route. And Haworth is now also a pioneer in China-UK trade. He was recently one of a handful of dignitaries to win the prestigious China Friendship Award for his work with China – an award that puts him alongside some of the world’s most notable diplomats, academics and scientists. So how did it all come about?

Haworth works in biotech innovation and only started looking at the China market in 2010. Two years later, he was working in China as the CEO of a bioinformatics company that uses neural networks to analyse big data. He has set up a Sino-UK Fund – a later stage growth capital fund that uses Chinese capital in order to bring technology and products from the UK and Europe into China. This work sees him taking British companies operating in the biotech, agri-tech and green tech areas to China to set up operations and work on test projects. Many companies, he says miss out on the China market because of the perceived complexity of the barriers to entry. The fund invests in European and UK companies in order to help negotiate any barriers and bring them to the Chinese market.

However, it is his work on cross-cultural education that has made this businessman from England stand shoulder to shoulder with some of the world’s most respected philanthropists and thinkers.

They were able to talk about everything from growing potatoes to cross border investment activity

The Dynasty Youth Exchange was established for people aged between 13 and 17 to engage with each other. “We found that people above a certain age have a terrible lack of understanding about each other’s countries – you could say they have prejudices,” says Haworth from his home just west of Cambridge. “Young people don’t have such prejudices – they just start talking.”

The certificate Haworth received as a recipient of the Friendship Award

The exchange, which aims to eradicate prejudice and misunderstanding between China and the UK, now has up to 1,500 children coming from China to the UK next year to experience a two-week cultural education programme that sees them working and playing together; they don’t simply show the other culture their own traditions. “We have them working on sports or engineering projects or musical projects together as opposed to having one group from China performing a dragon dance and one group from the UK presenting a Shakespeare play.

Haworth’s commitment to China saw him win the provincial level Yellow Crane Award for Wuhan in 2015. “We had to put together a 100-page book of information just to apply for the Award but decided it was worth doing, with encouragement from the local government,” says Haworth. “At the time I didn’t realise that the award might be helpful but people were allocated to help us make use of it,” he says. In 2017 the Wuhan government suggested that they apply for the national award. Following this, there was, says Haworth, various opaque requests for more information and then one day his office in Wuhan received a phone call asking them to come into the offices of the regional Ministry of Foreign Affairs, where they were told they had won the award.

It was not just Haworth’s great, great grandfather who had ties with China. Nearly every generation of Haworth’s since then have had some dealings with the country, including Simon’s own grandparents. “I had vague recollections of my grandparents visiting China but it was only after my recent trips to China that we went into the attic and got out all of granny’s diaries,” Haworth said. “She returned from China in 1964 and she recorded the trips with all these stamps, menus, bills and so on, pasted in to the diaries. Descriptions of all the places she has been and who she met. There was a description of the first bridge that had been built across the Yangtze River in amazing detail.”

Haworth was among 50 winners of the award: “I said to my wife, there appears to be 49 amazing experts plus me,” he says. “The skills and the experience is extraordinary and since the award, I have made a great effort to keep us all linked together. There is a German doctor who had been practising medicine in rural Yunnan for 15 years. Another lady had been deeply involved in museum activity and scientifically interesting sites in China. She was a curator of a museum in the US and well known in academic circles in which she was working. Her name is Mary Gardener Gates – Bill Gates stepmother. It was one of the most enjoyable groups you could possibly imagine.”

The days before the awards ceremony all fifty experts from 21 countries stayed together at the Foreign Experts Hotel in Beijing and were asked to attend a foreign experts’ consultation symposium, where they were asked to give their thoughts and observations about important areas of China’s future and areas for the government to focus on.

Haworth with Vice Premier Ma Kai

“The 50 experts around the table were engaging in detailed discussion about innovation, people, products, globalisation – it was very constructive and the most open discussion I have had in China,” says Haworth. “That’s where you could see the diversity of expertise across the people. They were able to talk about everything from growing potatoes to cross border investment activity. The inputs are taken very seriously and fed into relevant ministries.”

Simon Haworth is the great, great grandson of one of the silk traders that used to navigate China’s ancient silk route

Following the round table, they were taken by police escort to the Great Hall of the People were they were to formally receive the awards. Here they met with Vice Premier Ma Kai and Haworth was presented with the medal and award. Later a lavish banquet was given in the Great Hall before they returned the following day, on National Day, for a dinner for 2,000 people that included Premier Li Keqiang and President Xi Jinping, where Li Keqiang spent some time talking with Haworth about cross border activity and the Sino UK Fund.

As well as an incredible honour, Haworth says that it affords an extraordinary level of access and trust. “China is a relationship-based society when it comes to business and this award shortcuts two years of getting-to-know-you.”

Haworth’s son George recently spent three months in Shanghai on an internship making him the sixth consecutive generation of Haworths to work with China. It’s not hard to imagine his own great-grandchildren one day coming across Haworth’s award, which currently sits on his desk beside a photo of him with Premier Li, and telling tales of how he once had dinner with the both China’s Premier and China’s President at the Great Hall of the People.

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