China is emerging as a global magnet for biopharmaceutical investment in 2025, even as foreign direct investment (FDI) in many other sectors loses momentum. Looser restrictions, targeted incentives, and Beijing’s drive to boost healthcare innovation have sparked a wave of commitments from global drugmakers, led by AstraZeneca’s landmark $2.5 billion pledge.
Between January and July 2025, foreign companies announced more than $4 billion of greenfield FDI in China’s biopharmaceutical sector, according to preliminary data from fDi Markets. That is six times higher than the same period last year and already surpasses every full-year total on record. Biopharma alone accounted for roughly a third of China’s total announced inward FDI of $11.7 billion during the first seven months of the year.
The surge is notable given the broader slowdown in foreign capital entering China. While investment in traditional industries such as chemicals, finance, and electronic components has faltered, biopharma is booming. Annual FDI pledges outside healthcare, which peaked at $112 billion in 2018, had dropped below $20 billion by 2022 before partially recovering to $36 billion in 2023 and 2024. This year, however, the downward slide has resumed, with carmakers recording their weakest half-year commitments since records began in 2003. Official commerce ministry data mirrors the decline, showing total inward FDI falling 13.4% year-on-year to 467.3 billion yuan in the January–July period.
By contrast, multinational pharmaceutical groups are doubling down. UK-listed AstraZeneca, China’s largest foreign drugmaker by sales, announced in March that it will build a major R&D hub in Beijing. The decision came after the company reshuffled its leadership following the arrest of former China head Leon Wang last year over alleged illegal drug sales. Denmark’s Novo Nordisk has revealed expansion plans in Tianjin, while Switzerland’s Roche is enlarging its Shanghai footprint. They join France’s Sanofi, US-based Eli Lilly, and Japan’s Daiichi Sankyo, all of which announced major projects in 2024.
Analysts attribute the momentum to Beijing’s gradual opening of the healthcare sector. Restrictions have been loosened in areas such as stem cell research, gene therapy, and diagnostics within pilot free-trade zones in Beijing, Shanghai, Guangdong, and Hainan. On August 27, the State Council approved a new biopharma innovation plan for Jiangsu’s free-trade zone. Since late 2024, wholly foreign-owned hospitals have also been permitted in nine cities.
“Biopharma is one of the few areas where globalisation seems to continue,” observes Jeroen Groenewegen-Lau, head of the Mercator Institute for China Studies’ programme on science, technology and innovation. He points to tariff exemptions for biopharma products in the US-China trade dispute and the growing number of licensing deals for Chinese-developed drugs.
The strategy aligns with Healthy China 2030, Beijing’s flagship initiative launched in 2016 to expand healthcare access and position China as a hub for medical innovation. With the world’s second-largest pharmaceutical market after the United States, China offers both scale and cost advantages. Clinical research remains relatively cheap, and government support for R&D has risen sharply. According to OECD data, China’s gross domestic R&D spending reached $780 billion in 2023—double the figure from a decade earlier.
These investments have borne fruit. In 2024, licensing deals for Chinese-developed drug candidates hit $41.5 billion, a 66% jump on 2023. Once seen as a cog in global supply chains, China’s biopharma industry is increasingly producing original innovations.
Yet, foreign companies face hurdles in turning investment into sustained profits. While Beijing has opened the market to more foreign drugs, it is also driving down prices. Some firms, such as Belgium’s UCB, have scaled back by divesting older product lines amid tightening margins.
Competition with Chinese companies is also intensifying. Industrial policies continue to prioritize self-reliance, raising questions about how long Beijing will welcome foreign dominance in the sector. “Ultimately, foreign firms in China should be aware that their presence on the Chinese market is seen by Beijing as temporary and limited,” warns Groenewegen-Lau.
For now, though, global drugmakers view China as too important to ignore. The combination of regulatory openness, strong market demand, and Beijing’s healthcare ambitions has made biopharma a rare bright spot for FDI in an otherwise cautious investment climate. Whether these gains prove durable—or merely a stepping stone toward Chinese self-sufficiency—remains the central question for the industry.
