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David Chao

As Greater China markets charge into the third quarter with the wind at their backs, there is increasing evidence that 2025 is the year Chinese intellectual property goes global.
A month ago, I wrote about the peculiar appeal of the Labubu doll, which seemingly leapt out of nowhere to become a global pop culture phenomenon. This was the latest example of a successful Chinese entertainment IP – a unique asset with intangible social value – taking off.
Meanwhile, China is also making huge progress in humanoid robotics, an advanced technology segment where the country is dominating. This burgeoning industry is ripe for value creation as robotics developers not only own the production and hardware assets, but also the underlying artificial intelligence IP powering their capabilities.
The modern global economy has IP at its core. A 2023 analysis from the UCLA Anderson School of Business calculated that intangible assets comprised more than 90 per cent of the total assets on the balance sheets of S&P 500 companies.
The market increasingly sees IP as the catalyst for further growth in Chinese stock valuations, with the latest prominent example being China’s booming biotechnology sector. While Hong Kong’s Hang Seng Index finally turned bullish this year and is up more than 20 per cent in the year to date, the Hang Seng Biotech Index has nearly doubled.
What is behind this? The transformation from an industry focused on low-cost generics and mass manufacturing towards high-value innovation was driven by deliberate policy choices and facilitating competition in the domestic market. Regulators took aim at reining in drug prices starting in 2018 with the launch of a national procurement scheme that allowed for centralised negotiating and bulk purchasing. A 2024 study by the Hong Kong University of Science and Technology estimated that the programme had saved China’s healthcare system more than 500 billion yuan (US$69.3 billion) since implementation, nearly all of which came from generic drugs.


Meanwhile, the government’s ambitious “Made in China 2025” strategy elevated biotech to a national priority, channelling capital and talent into the sector in moves mirroring efforts in other key areas such as renewable energy, robotics and rail technology. Other regulatory changes announced in 2015 were implemented to streamline drug approvals, enforce data integrity and boost transparency.
Policy support is ongoing. The latest initiative was announced on July 1, when the National Healthcare Security Administration introduced new measures to boost innovative drug development, spanning research and development incentives, regulatory streamlining, hospital access and reimbursement.
The result has been a supercharged pathway for Chinese drug innovation and novel therapies. Ten years ago, Chinese companies had just 160 innovative compounds – around 6 per cent of the global pipeline – in global clinical drug assets. Today, they have 36 per cent, ranking second only to the United States. Between 2020 and 2024, 20 of the world’s top 50 companies generating innovative drug candidates were Chinese, up from just five in the prior five-year period.
Most remarkable, though, is how Chinese biotech firms have started selling their IP to global multinationals to test and commercialise around the world, a process known as “out-licensing”. Historically, these firms operated in the opposite direction and would buy the rights to early-stage drug candidates from foreign pharmaceutical makers and then try to invest and commercialise the drug in the Chinese market. The industry back then was heavily reliant on foreign innovation to fill its pipelines.

That script has now flipped. Chinese biotech firms are now more likely to out-license, developing novel therapies from the rich ecosystem that has been nurtured in China and then testing outside the country. This approach provides Chinese firms with upfront payments, potential royalties and global validation of their research and development capabilities.
This switch has paid off handsomely. Out-licensing deals between global drug manufacturers and Chinese biotech firms have exploded in 2025 to US$66 billion, more than the entire value of announced global drug licensing deals for all of 2024.
The deals keep rolling in. On July 28, multinational drug manufacturer GlaxoSmithKline announced a US$12.5 billion out-licensing deal with Chinese biotech company Jiangsu Hengrui Pharmaceuticals for 12 preclinical drugs and therapies. Each new publicly announced out-licensing deal only adds fuel to the biotech market, and there is reason to believe the trend will continue.
Many multinational pharmaceutical companies are approaching a “patent cliff” with blockbuster drugs losing exclusivity by the end of the decade. They will need to replenish their pipelines quickly, and licensing early-stage assets from China offers a faster, lower-risk alternative to in-house discovery.


Could the current protectionist agenda of US President Donald Trump derail the path forward? Perhaps, but Chinese biotech firms have already diversified beyond the US for their licensing deals. Since 2023, Europe has been the top destination for China-developed drug pipelines based on out-licensing volume, while other Asia-Pacific markets have also opened.
It is clear the out-licensing model is immensely profitable for China’s emerging biotech leaders. However, this is only possible because they are producing truly class-leading products built on the back of high-value innovative IP.
Chinese biotech has immense potential to further drive the country’s IP economy, though much work still needs to be done. Achieving pre-eminence hinges on successfully fostering a culture of risk-taking, attracting world-class talent and ensuring sound IP protection. If these components are properly addressed, Chinese biotech is well-positioned to be a dominant economic force in the years ahead, not to mention an expanding part of Hong Kong’s increasingly diverse equity market.


Alibaba open-sources medical AI model that can detect cancer and nearly 150 conditions

How China plans to ‘firmly rank at the global forefront’ with 25% of first-in-class drugs

ByteDance spin-off Anew Labs raises US$290m as AI drug developers enjoy fundraising boom

GSK licenses Chinese firm’s cancer drug in US$750 million deal

Biomedicine: Companies

Biotech successes helping Chinese intellectual property go global

Visitors walk beside the booth of British-Swedish multinational pharmaceutical and biotechnology company AstraZeneca during the third China International Supply Chain Expo in Beijing on July 17. Photo: EPA

Workers sort the fungus Lyophyllum decastes on a production line of a biotechnology company in Lianyungang, Jiangsu province, on July 21. Photo: Getty Images

Innovent, BeOne are poised for profits in 2025, in milestone for Chinese biotech start-ups

A close-up shot of a microscope in a laboratory. Photo: Shutterstock

Innovent Biologics is expected to post a first-half net profit of 260 million yuan compared with a loss of 392.6 million yuan a year earlier. Photo: Handout

A researcher using a micropipette pipette in a lab. Photo: Shutterstock

Hong Kong firms eye proprietary Chinese medicine opportunities on the mainland: HKTDC

Test samples in a lab at the Macau University of Science and Technology. Photo: Edmond So

Wuxi AppTec raises US$981 million in Hong Kong offer amid growing appetite for Chinese biotech

Wuxi AppTec’s research center in Shanghai on June 6, 2023. Photo: Getty Images

Wuxi AppTec’s executives (L-R): Joint Company Secretary Yao Chi, Chairman Dr. Li Ge and Co-Chief Executive Officer Edward Hu during the company’s IPO press conference on November 30, 2018. Photo: Edward Wong

Molecular genetics and biotechnology in a scientific research laboratory on January 10, 2017. Photo: Shutterstock

State Key Laboratory of Quality Research in Chinese Medicine at the Macau University of Science and Technology on April 28, 2025. Photo: Edmond So

Pfizer, Chinese biotech firm 3SBio complete worldwide licensing deal for cancer drug

Pfizer agreed to buy a 1.3 per cent equity stake in 3SBio for HK$785 million. Photo: Shutterstock

Established in 1993, 3SBio is developing products in the areas of oncology, rheumatology, nephrology and metabolism. Photo: SCMP

Chinese biotech’s mega drug-licensing deals with multinationals surge on cost savings

Good mid-stage drug candidates from China at prices far below those in the US market are driving an increase in licensing deals, analysts say. Photo: Shutterstock

Sun Chuan, Shanghai-based managing partner at international law firm Morrison Foerster. Photo: Handout

Opinion

China Opinion

Economy

China Economy

After years of buying licences for foreign-made medicines, Chinese biotech firms are now profiting handsomely from their own innovations


After years of buying licences for foreign-made medicines, Chinese biotech firms are now profiting handsomely from their own innovations.


Biomedicine: Industry Trends

Medicine

Science

United States

China

Donald Trump

Standard & Poor's (S&P)

GlaxoSmithKline

Jiangsu Hengrui Pharmaceuticals

National Healthcare Security Administration (China)

Expresses the views, ideas and conclusions of the author. (Eg. Enough of Crazy Rich Asians, think of crazy poor Hongkongers.)


Biotech successes helping Chinese intellectual property go global

.css-1c6uqr6{color:inherit;font-weight:inherit;font-size:inherit;font-family:inherit;line-height:inherit;overflow-wrap:break-word;}After years of buying licences for foreign-made medicines, Chinese biotech firms are now profiting handsomely from their own innovations

After years of buying licences for foreign-made medicines, Chinese biotech firms are now profiting handsomely from their own innovations