Tapping the Global Potential of China’s Biotech Surge

When the Commissioner of the FDA publicly warns that the United States is losing ground to China in early-stage drug development, that should be seen as a signal. Former FDA Commissioner Marty Makary recently pointed to structural differences, particularly around trial start-up and institutional processes, that are enabling the Chinese biopharma industry to outpace other global regions.

For sponsors allocating capital globally, this opens a competitive opportunity to consider, albeit a complex one. China is no longer a peripheral or low-cost execution market but rather has become an integrated development engine with scale, capital, regulatory alignment, and growing global ambition.

Five years ago, most Western executives would not have taken that comparison seriously. But today, it’s clear that the opportunity is significant. Likewise, the risks are real.

The difference between success and frustration often comes down to how the program is structured and who you partner with on the ground. I say that not as a commentator, but as a CFO who has operated in China for years and who has recently integrated one of the largest Chinese CRO platforms into a global operating model.

The Momentum Is Real

There is little doubt that resurgence in China is real. We are seeing it in sponsor conversations, inbound partnership requests from mid-sized CROs that lack presence in Asia, and in the volume of activity across therapeutic areas.

Internal analyses conducted over the past year show a sharp uptick in engagement and development planning tied to China-based programs. This is happening against a regulatory backdrop that has fundamentally changed the development landscape.

Since China joined the International Council for Harmonisation in 2017, streamlined its IND review timelines, cleared historical backlogs, and introduced the Marketing Authorization Holder system, its market has shifted from generics-dominated to innovation-driven. Chinese biotechs are well funded and are increasingly designing programs with multinational endpoints in mind.

The data supports this momentum. Clinical trial registrations in China have grown steadily over the past several years, with innovative drug trials representing a growing share of total activity.

China has moved from isolated regional development to integrated global participation. In fact, industry analysis now shows China conducting more total clinical trials than the United States,¹ underscoring how quickly the center of gravity has shifted.

Makary’s comments should be understood in that context. When U.S. regulators acknowledge that trial start-up and early-stage execution may be more efficient elsewhere, sponsors need to recalibrate what they assume about development geography.

Two Very Different China Pathways

One of the most common mistakes sponsors make is treating China as a single strategic decision. In practice, there are two very different pathways:

• The first is inbound: A Western sponsor is running a multinational study and wants to incorporate China as a recruiting engine.
• The second is outbound: A Chinese biotech with capital is seeking to move into global development, often starting with Phase I work in Australia or other favorable jurisdictions before returning to China for later phases.

The economics and operational dynamics of these two pathways are not the same. On the inbound side, China offers access to large patient pools, extensive hospital networks, and increasingly sophisticated site infrastructure.

In some therapeutic areas, the density and organization of hospital systems exceed what sponsors are accustomed to in the U.S. or Europe. There are site networks with hundreds, sometimes thousands, of connected investigators.

The ability to access performance data, historical trial experience, and investigator track records is deeper than many Western executives realize. Properly structured, inbound programs can preserve global margins and accelerate timelines.

Outbound is a second area for strategic opportunity. We are rapidly witnessing a common pattern of well-funded Chinese biotechs pursuing global ambition paired with strategic discipline.

A relatively new trend that we have seen emerge at Emerald Clinical is early-phase work in Australia, leveraging tax credits and efficient regulatory processes, followed by Phase II expansion in China. These sponsors are looking for partners who can operate seamlessly across regions, instead of a one-off transactional vendor.

Our observation is also reflected in the growing proportion of Phase II and III trials being conducted in China. According to one analysis, “Trial volume in China has risen rapidly from roughly one-third of the U.S. and one-half of the European levels in 2019 to approximately 0.8× and 1.1× respectively by 2024.”²

This rapid shift signals sustained late-stage commitment. If you are a global sponsor, understanding these flows is essential. China is not simply a recruitment mechanism but a source of pipeline, licensing opportunity, and co-development.

The “China-for-China” Trap

Where sponsors and CROs get into trouble is in what I describe as the “China-for-China” trap. There is intense pricing pressure in the local-only segment of the market.

When China is positioned as a standalone, low-cost program, sponsors are pushed into commodity competition with domestic providers. This dynamic compresses margins and has consequences, including turnover, oversight gaps and degraded execution.

From a sponsor's perspective, a lower bid does not automatically translate into lower total cost. If the CRO’s operating model in China is structurally margin-constrained, that pressure eventually shows up somewhere else, such as in turnover, in oversight strain, and in resource allocation decisions that are not apparent in the initial proposal.

I have seen what happens when organizations are forced to operate under those conditions and it is difficult to sustain for companies that do not have a strong local presence. China can be one of the most powerful strategic assets in modern clinical development, especially when it’s integrated into a global program.

The best approach is often to design trials that can start locally and scale globally, using the same molecule, data and consistent operating model.

What Sponsors Should Ask Before Entering China

For biotech executives considering China today, I would focus on several questions.

• First, what is the true depth of the CRO’s site network? Not a list of hospitals, but actual operational access. Do they have long-standing relationships? Do they understand how those networks function day to day? Can they demonstrate recruitment performance by therapeutic area?
• Second, how is the China team integrated into global project management? Is there unified oversight, or is China managed as a subcontracted geography? Sponsors should be wary of fragmented operating models that rely heavily on third-party relationships without direct accountability.
• Third, what is the financial sustainability of the China platform? A partner’s balance sheet and margin profile matter. If their China operations are built on aggressive pricing and thin margins, you are assuming indirect execution risk.
• Fourth, what is the regulatory strategy? While China’s regulatory reforms have dramatically improved timelines and alignment, there are still unique expectations and documentation nuances. This is why deep experience matters.

These are just some of the operational realities that affect speed, cost, and data integrity. And it points to why it’s easy to stumble in this market with the wrong strategy.

Building a Global-China Model

As we work closely with our affiliates in China, primarily Wuxi Clinical along with Medkey and GoBroad, we can see this becoming a reality. Wuxi Clinical built one of the largest and most deeply embedded CRO platforms in China.

It developed extensive site relationships and operational scale. At the same time, it experienced firsthand the volatility that can come with geopolitical perception and market shifts.

The SMO layer is often underappreciated. Partners such as Medkey are critical in the China clinical trial ecosystem. They provide direct access to sites and patients, support coordinator staffing, and play a central role in maintaining data quality and protocol adherence at the site level.

Connecting both the CRO platform and SMO layer into our global CRO framework has reinforced several lessons for me personally.

• First, China’s infrastructure is far more developed than many Western executives assume. The scale of hospital networks and the depth of site-level data are extraordinary assets when properly accessed.
• Second, local experience without global integration is not enough. Your China strategy must be connected seamlessly to your global strategy.
• Third, credibility in China is built over years, not quarters. Western executives often underappreciate the depth to which relationships and reputation matter.

When we evaluated how to position ourselves for the next decade of clinical development, the answer pointed decisively towards structural integration. By properly working and enhancing our relationship with Wuxi Clinical, we are working to build a model capable of supporting both inbound and outbound programs.

Rethinking Innovation and Capital Allocation

Makary’s comments should force a broader reflection. The China story informs us that innovation is defined by execution speed, regulatory alignment, and capital efficiency.

China’s growth is enabled by coordinated infrastructure, centralized hospital systems, and a regulatory environment that has moved rapidly toward global harmonization. The country now accounts for roughly 39% of global clinical research activity, according to industry analyses.³

Moreover, a 2025 Goldman Sachs analysis found that 46% of all new molecular entities entering clinical trials originated in China.⁴ Both data points would have been unthinkable a decade ago.

And while biopharma investment into China declined in 2023 amid global capital retrenchment and regulatory uncertainty,⁵ that contraction now appears to have been temporary, with innovation output and trial initiation trends now pointing firmly toward sustained long-term growth. For sponsors, this changes capital allocation strategy as they consider how to incorporate China into their multinational programs while also limiting avoidable risks.

Accessing the Upside Without Absorbing the Downside

China offers large patient pools, accelerating biotech investment, increasingly efficient enrollment, and a growing pipeline of globally ambitious companies. It also presents pricing pressure, local competition dynamics, and regulatory complexity that require experience to navigate.

Sponsors who enter the market casually often encounter friction, while those who enter with informed strategy and integrated partners can build a meaningful competitive advantage. The outcome largely depends on whether they approach it with the right structure and the right operating model.

From where I sit, I believe that combining deep China know-how with global capability, financial stability, and proven cross-border execution are the keys to success. China’s biotech surge is real, as is the opportunity behind it.

But realizing that opportunity requires thoughtful discipline, deep experience, and partners who understand both sides of the equation.

About the Author

Tony Proctor is CFO of Emerald Clinical Trials. He is an expert in financial strategy, corporate finance, M&A, global systems integration, and private equity partnerships. With over 25 years of financial leadership experience, he has held leadership roles at Lexitas, Parexel, and Syneos (formerly INC Research).

References

1. Franklin Templeton. “China Emerging as a Global Biotechnology Player.” Franklin Templeton, n.d., https://www.franklintempleton.com/articles/2025/clearbridge-investments/china-emerging-as-a-global-biotechnology-player. Accessed 27 April 2026.
2. L.E.K. Consulting. “Advancing Innovation and Global Reach: The Next Chapter in China’s Clinical Development Evolution.” L.E.K. Consulting, n.d., https://www.lek.com/insights/contractpharma-services/advancing-innovation-and-global-reach-next-chapter-chinas-clinical. Accessed 27 April 2026.
3. BioSpace. “Clinical Trials Are Increasingly Going Global, With China a Main Beneficiary.” BioSpace, n.d., https://www.biospace.com/drug-development/clinical-trials-are-increasingly-going-global-with-china-a-main-beneficiary. Accessed 27 April 2026.
4. Goldman Sachs. “China Is Increasing Its Share of Global Drug Development.” Goldman Sachs Insights, n.d., https://www.goldmansachs.com/insights/articles/china-is-increasing-its-share-of-global-drug-development. Accessed 27 April 2026.
5. Tony Proctor and Abdul Rastagar. “Weathering the Shifting Trial Landscape.” MedCity News, June 2025, https://medcitynews.com/2025/06/weathering-the-shifting-trial-landscape/. Accessed 27 April 2026.