Over the past decades, China has become the dominant force in the global drug market. For a long time, the pharmaceutical manufacture was dominated by respective players coming from Western countries. The Chinese, initially engaged in subcontracting, are now increasingly active, challenging Western companies, becoming more and more focused on innovation and investigation and development. It is besides crucial to usage the vast interior marketplace and state support. China is now the second largest marketplace in the world, after the United States. marketplace size increased from 1.21 trillion RMB in 2010 to 2.97 trillion RMB in 2024.[1], which shows the scale of the improvement of this manufacture in the mediate State. The Chinese pharmaceutical marketplace presently accounts for as much as 29.5% of the global R & D market[2]. However, China's central function in global pharmaceutical supply chains besides raises questions about dependence, resilience and geopolitical vulnerability. knowing China's position in this sector is so crucial for both governments and manufacture professionals.
China has become a power in the global manufacture of active pharmaceutical ingredients. In June 2025 they accounted for about 20% of global production, delivering them to over 180 countries[3]. Chinese production capacity represents more than 2 million tonnes of ingredients per year, while covering more than 2000 unique medicinal products. There are more than 1,500 manufacturers within the industry, of which more than 500 are registered in the US Food and Drug Agency[4]. From a financial point of view, the Chinese marketplace for active pharmaceutical ingredients is expected to emergence from $15.9 billion in 2025 to $23.3 billion by 2030, reflecting an average yearly growth rate of 7.86%, which is well above the global average[5].
According to the HSBC report, the growth trend should be maintained, with forecasts suggesting around 10% increase in product sales and 11% increase in profits in 2025 for Chinese pharmaceutical companies.[6]. Moreover, global pharmaceutical companies increasingly value Chinese projects, while the number of licensing contracts increases[7]. Chinese drug producers have moved from a tiny presence on the global licence marketplace to a dominant position in a fewer years. This structural change, which consists of strong sales and licence revenues, is the basis for above-average sector performance and affirmative analyst forecasts[8].
When discussing the subject of the pharmaceutical manufacture in the mediate State, it is impossible not to mention the past of this industry, whose gradual growth has enabled achieving a dominant position in the world, which China can enjoy today. At the end of the 20th century and at the beginning of the 21st century, China played the function of a leading maker of active pharmaceuticals and generics. This specialization resulted from the volume of production which the mediate State could boast and the resulting cost-effectiveness. Western companies so sought cost-effectiveness in China, not innovation. In fact, at the time, China recorded a deficit in terms of R & D spending in this industry. However, there were improvement plans that were included in programmes specified as “Healthy China 2030” or “Made in China 2025”. Through these initiatives, branches specified as biomedicine and high-performance medical devices have been identified as crucial to achieving global competitiveness. This was followed by crucial financial and political incentives, which would lead to innovation and self-sufficiency. Regulatory pathways have been improved, incentives have been created for abroad investment in R & D, and most importantly, the country has been strengthened to believe that China should become a leader in pharmaceutical innovation[9].
Strategic government initiatives, specified as the Action Plan for the Quality improvement of the Pharmaceutical manufacture for the period 2023-2025, adopted by the Council of State in August 2023, played a key function in supporting pharmaceutical innovation and wellness prevention[10]. The National Medical Products Agency, erstwhile seen as a bottleneck, underwent a extremist transformation. It has joined global harmonisation bodies specified as the global Council for the Harmonisation of method Requirements for Pharmaceutical Products for Human Use, signaling its commitment to best practice in the world. The Agency has besides introduced accelerated procedures for the review and approval of innovative medicines, in peculiar those that respond to important, unmet medical needs in areas specified as oncology and uncommon diseases. This reduced the time to marketplace fresh therapies, making China a much more attractive place to conduct clinical trials and introduce fresh products. The government's readiness to place innovative drugs on the National Refunds Agency has besides proved to be a breakthrough, guaranteeing marketplace access and more fresh therapies, frequently at lower prices[11].
In 2025, the Chinese pharmaceutical sector achieved very good results, which are mostly driven by increases in licence revenues. Chinese licensing agreements accounted for around 50% of the global value of specified transactions in the first 8 months of 2025, as well as an increase from 30% in 2024 and an almost zero level in 2018.[12] This manufacture is undergoing profound change and is moving towards innovation, with government-supported initiatives, R & D spending and demographic change. In China, we are seeing a increasing share of the mediate class and the population is ageing, which increases wellness needs.
Analyzing the current data on the marketplace share of pharmaceutical companies on the Chinese market, it is worth mentioning that the biggest player on the Chinese pharmaceutical marketplace is the Danish Novo Nordisk this year. This involves the company entering the Chinese obesity drug marketplace with Wegovy and the fact that almost half of Chinese adults are overweight or obese[13]. AstraZeneca was placed second, followed by Chinese Jiangsu Hengrui Pharmaceuticals. Hengrui's R & D expenditure in 2023 amounted to 6.15 billion yuan, which represents more than a 4th of the company's full revenue. Hengrui strengthens its position in areas specified as oncology, cardiovascular diseases and central tense strategy disorders, and notes advancement in environmental protection, social work and corporate governance. The Chinese company Shijiazhuang Pharmaceutical Group was ranked 4th in the ranking in 2025, strengthening its leadership position by expanding its product portfolio, global R & D and strategical innovation. The company actively develops more than 130 innovative drug projects in the field of oncology, neurology, cardiology, immunology, metabolism and anti-infectious. erstwhile planning to submit more than 50 fresh products or indications for marketplace approval over the next 5 years, the CSPC implements 1 of the most ambitious R & D programmes in the Chinese pharmaceutical sector. The strategy of global expansion of the company is gaining momentum, and it is presently conducting clinical investigation on 19 innovative medicines worldwide. The breakthrough was the approval of the Xuanning antihypertensive medicine, which was the first medicine based on an innovative molecule developed by the Chinese company to receive full approval from the American Food and Drug Agency. The 5th position on the Chinese pharmaceutical marketplace belonged to Chongqing Zhifei Biological Products. The company's activities signal the increasing importance of vaccines and biological products in China. Zhifei benefited from the increasing request for HPV vaccines and respiratory diseases, positioning itself as a leader in the fast-growing sector of preventive healthcare[14]. Although Western companies inactive have a strong marketplace position, there is besides a improvement trend for Chinese companies, which is undoubtedly affected by their innovation.
The Chinese ecosystem of the "AI + Pharma" is developing rapidly and the AI is expected to play a key function in reducing R & D costs and improving efficiency through more optimised data integration capabilities, which will contribute to further improvement of pharmacological research[15]. Through the integration of software and hardware innovations in the investigation and improvement process – from drug identification, by selection of candidates, to validation of data, China has a chance to become a leader in the discovery of medicines utilizing artificial intelligence. Chinese wellness insurance strategy thanks to a large population provides a immense set of learning tools for artificial intelligence models[16].
In addition to licensing and innovation, China is besides exporting its pharmaceutical achievements through the alleged "Silver wellness Trail". As part of this initiative, which is part of the wider Belt and way Initiative, China has funded wellness care infrastructure in Africa, Asia and the mediate East, from hospitals in Ivory Coast to pharmaceutical production in Nigeria. However, these projects are not good intentions, but soft power tools to build long-term economical ties and strengthen China's image as a friendly global wellness leader. In practice, however, this raises questions about dependence and influence[17].
With the improvement of technological competition in the biotechnology sector, China is increasingly focusing on close regions to alleviate the force on US supply chains. As part of this transformation, Southeast Asia has become the preferred direction. Geographical proximity is an excellent chance for China to diversify the supply chain from the United States to avoid risks or supply interruptions. ASEAN has extended commercial networks, infrastructure and increasing production capacity. ASEAN countries are seen as key players in converting supply chains for the improvement of Chinese biotechnology. Moreover, with a population exceeding 600 million and rapidly changing wellness demand, the region offers China crucial opportunities to increase its influence and marketplace share. erstwhile offering access to advanced technologies, Chinese companies can usage local data to make biopharmaceutical products, services and standards tailored to the circumstantial needs of the region, possibly leading to a increasing dependence on Chinese biotechnology. Moreover, the strong dependence of the region on external technologies and expertise can put it at considerable hazard in the event of geopolitical tensions. For example, the ongoing competition between the United States and China for biopharmaceutical products, including intellectual property and marketplace access issues, has already led to export control and disruption in technologies essential for the improvement and production of biopharmaceuticals. specified circumstances may put additional force on South-East Asian countries, forcing them to side with technological access and investment, thereby undermining their autonomy.[18].
It is estimated that up to 95% of ibuprofen imported by Europe and the US is produced in China. In addition, 70% of paracetamol, 80% of key antibiotics and 80% of metformin worldwide come from China. These figures item China's almost monopolistic position as regards key pharmaceuticals[19]. Moreover, Chinese pharmaceutical active substances manufacturers reduce prices by up to 50%[20]. Consequently, even India, offering competitive prices, is incapable to compete at this level. In this situation, the United States or Europe are all the more improbable to compete with Chinese products, while customs and targeted industrial policy appear to be necessary[21]. On the another hand, duties may distort supply chains and the availability of medicines, as well as higher prices, which may prove peculiarly severe for low and medium-income countries[22].
Europe is increasingly dependent on China for the most popular medicines. As a consequence of expanding price competition from China, any European suppliers close their factories. In addition to closing factories in Brindisi and Haverhill[23] The French company Euroapi will reduce the production of 13 medical ingredients. This includes paracetamol and metamizole, as well as a number of another popular medicines utilized in heart failure, cirrhosis, hypertension and kidney disease.[24]. The marketplace share is likely to fall to Chinese pharmaceutical companies specified as Shandong Xinhua, China Grand, Hebei Jiheng and Zhejiang Haisen. According to the Critical medicine Alliance, a group set up by the European Commission, which first met in April this year, India and China already produce 60 to 80 % of active substances in medicines sold in Europe[25]. Europe is facing the challenge of reducing dependence on abroad suppliers of key medicines. Ursula von der Leyen considered this issue a precedence shortly after her election for the second word as president of the European Commission in July[26].
Drug shortages happen on the European marketplace continuously and the problem is getting worse. The shortages include antibiotics or vitamins, the highest minute erstwhile it comes to supply breaks were in the years 2022, 2023 and 2024, erstwhile supplies of 136 drugs were critically low[27]. These shortcomings were besides influenced by Chinese restrictions on the COVID-19 pandemic. expanding supply chain safety will be costly, as active substances from Chinese suppliers are 35-40 % cheaper than those in Western countries, and the price is frequently the only origin taken into account by buyers, provided suppliers meet quality standards[28]. Changes in the supply chain will undoubtedly be a test for the European economical safety Programme. In the first step, the European Medicines Agency published a list of 200 critical medicines[29]. The future Critical Medicines Act aims to coordinate public procurement across Europe and make a more level playing field for European companies, for example by requiring imported active substances to meet the same environmental standards as European products[30].
The US is facing akin problems with dependence on Chinese pharmaceuticals. Concerns about the overdependence of US drug supply chains on China have increased rapidly during the COVID-19 pandemic, as the closure of Chinese production facilities highlighted the hazard of China relying on key medicines and ingredients[31]. Therefore, in August 2020 president Donald Trump issued a regulation ordering the Food and Drug Agency[32] make a list of the essential medicines and key natural materials to aid reduce dependence on abroad suppliers of these products and focus more on home production[33]. The scale of vulnerability of the American drug supply chain to products produced in China varies. any sources propose that the US's dependence on Chinese active substances from China is only 8%[34], while others point to as much as 47% as they take into account indirect dependence – another supplier of pharmaceuticals to the US, India, are besides dependent on China[35]. In order to counter the negative effects of dependence, the Trump administration launched an investigation under Section 232 to measure whether imports of pharmaceutical products and their ingredients pose a threat to national security.[36].
However, the pharmaceutical manufacture in China is besides experiencing difficulties. Environmental enforcement led to the closure of about 145 companies producing active substances and affected tiny and medium-sized natural materials producers. Limited competition allowed the remaining suppliers to rise prices, which in turn led to short-term supply instability and cost pressures[37]. Moreover, there are besides difficulties in building their position on abroad markets. The geopolitical situation, in peculiar the tensions between the US and China, will impede expansion to abroad markets. Legislative proposals in the US, specified as the BIOSECURE Act, citing concerns about national security, aim to limit the function of any Chinese biotech companies in the US supply chain. Moreover, Chinese companies face the challenge of building global commercial infrastructure, moving in complex refund schemes in different countries and, most importantly, gaining the assurance of doctors and patients who may be more acquainted with recognized Western brands. This requires long-term investment in marketing, and building a global position in quality and reliability[38].
In conclusion, ignoring the Chinese pharmaceutical marketplace seems impossible given the scale of the marketplace and the expanding innovation of Chinese solutions. The Chinese marketplace surely offers advanced growth potential, which, combined with government support and state strategies, and the increasing home market, is unprecedented. As a initially low-cost production centre, the country is taking increasingly bold steps towards innovation. Moreover, the dependence of another countries of the planet on supplies from the mediate East is simply a fact, and action to reduce this dependence is worth watching carefully. On the 1 hand, deliveries from your centre have provided global producers with a cost advantage, but at the same time have created a structural dependence among both Western and developing countries. Governments see the problem of this addiction, although the search for an alternate is not easy or, above all, cheap. A complete cut-off from China seems impossible, but possibly governments will find ways to diversify, for example through China + 1. In the end, China's impact on the global pharmaceutical marketplace highlights the request for sustainable interdependence – to guarantee efficiency and innovation without compromising autonomy or the continued flow of supply of medicines.
[1]https://pmc.ncbi.nlm.nih.gov/articles/PMC12479303/#:~text=The%20government%20has%20also%20implemented%20multidimensional%20incentives%2C,central%20chalenge%20for%20the%20pharmaceutical%20sector’s%20transformation (accessed 12.11.2025).
[2]Ibid.
[3]https://www.apifdf.com/blog/apis-export-from-china/ (accessed 12.11.2025).
[4]https://api.omrglobal.com/chinas-api-industrial-2025-fueling-global-pharma-with-scale-and-precision/ (accessed 12.11.2025).
[5]https://www.grandviewresearch.com/horizon/outlook/pharmaceutical-market/china (accessed 12.11.2025).
[6]https://www.scmp.com/business/china-business/article/3328097/chinas-pharmaceutical-sector-surges-amide-robust-growth-sales-and-licensing-income (accessed 12.11.2025).
[7]https://www.aastocks.com/en/stocks/news/aafn-con/NOW.1474374/last-news/AAFN (accessed 12.11.2025).
[8]https://www.scmp.com/business/china-business/article/3328097/chinas-pharmaceutical-sector-surges-amide-robust-growth-sales-and-licensing-income (accessed 12.11.2025).
[9]https://www.drugpatentwatch.com/blog/the-dragon-awakes-charting-the-unstoppable-growth-of-chinese-pharmaceuticals-in-the-global-market/?srsltid=AfmBoorz-x9KVXgqOu9Wjc Y9sEpo7OqJQdaEvdci-rJe0D3gObeFexO (accessed 12.11.2025).
[10]https://english.www.gov.cn/news/202308/25/content WS64e8954ac6d0868f4e8ded54.html (accessed 12.11.2025).
[11]https://www.drugpatentwatch.com/blog/the-dragon-awakes-charting-the-unstoppable-growth-of-chinese-pharmaceuticals-in-the-global-market/?srsltid=AfmBoorz-x9KVXgqOu9Wjc Y9sEpo7OqJQdaEvdci-rJe0D3gObeFexO (accessed 12.11.2025).
[12]https://www.scmp.com/business/china-business/article/3328097/chinas-pharmaceutical-sector-surges-amide-robust-growth-sales-and-licensing-income (accessed 12.11.2025).
[13]https://edition.cnn.com/2020/12/24/china/china-adult-overweight-intl-hnk (accessed 12.11.2025).
[14]https://www.imd.org/ibyimd/asian-hub/chinas-pharmaceutical-sector-innovation-meets-demographic-driven-demand/ (accessed 12.11.2025).
[15]https://pmc.ncbi.nlm.nih.gov/articles/PMC12479303/ (accessed 12.11.2025).
[16]https://restofworld.org/2025/ai-drug-discovery-startups-big-pharma-china/ (accessed 12.11.2025).
[17]https://www.onyxnewsroom.com/the-rise-of-chinese-pharmaceuticals-and-biotech/ (accessed 12.11.2025).
[18]https://carnegieendowment.org/research/2025/01/biopharmaceuticals-rising-chinas-strategic-pivot-to-southeast-asia-amide-great-power-tech-competition?lang=en (accessed 12.11.2025).
[19]https://api.omrglobal.com/chinas-api-industrial-2025-fueling-global-pharma-with-scale-and-precision/ (accessed 12.11.2025).
[20]https://www.tribuneindia.com/news/himachal/chinas-price-war-hits-indian-active-pharmaceutical-ingredients-industry/ (accessed 12.11.2025).
[21]https://prosperousamerica.org/china-now-producing-dozens-of-drugs-below-market-price-dumping-them-globally-is-next-move/ (accessed 12.11.2025).
[22]https://www.thelancet.com/journals/lancet/article/PIIS0140-6736(25)00780-9/fulltext (accessed 12.11.2025).
[23]https://www.fiercepharma.com/manufacturing/amide-restructuring-plan-production-shortfalls-euroapi-translate-steep-half-year-sales (accessed 12.11.2025).
[24]https://www.dcatvci.org/features/euroapi-announces-restructuring-plan/ (accessed 12.11.2025).
[25]https://asia.nikkei.com/business/pharmaceuticals/europe-reliant-on-chinese-drugs-after-local-products-price-out (accessed 12.11.2025).
[26]https://commission.europa.eu/strategy-and-policy/priorities-2019-2024/promoting-our-european-way-life/european-health-union/modernising-eu-pharmaceutical-legislation en (accessed 12.11.2025).
[27]https://www.reuters.com/sustainability/boards-policy-regulation/europe-strugles-with-chronic-drug-shortages-auditors-warn-2025-09-17/ (accessed 12.11.2025).
[28]https://www.apifdf.com/blog/apis-export-from-china-scale-dynamics-and-global-impact/ (accessed 12.11.2025).
[29]https://www.ema.europa.eu/en/news/first-version-union-list-critical-medicines-agreed-help-avoid-potential-shortages-eu (accessed 12.11.2025).
[30] https://health.ec.europa.eu/system/files/2016-11/qa importation 0.0.pdf#:~text=Answer:2020Article%2046(b)(2)(b)%20sets%20out%20that%20active,health%20equivalent%20to%20that%20of%20of%20the%20EU (accessed 12.11.2025).
[31]https://www.congress.gov/crs-product/R46304 (accessed 12.11.2025).
[32]https://trumpwhitehouse.archives.gov/presidential-actions/executive-order-ensuring-essential-medicines-medical-countermeasures-critical-inputs-made-united-states/ (accessed 12.11.2025).
[33]https://www.fda.gov/about-fda/reports/executive-order-13944-list-essential-medicines-medical-countermeasures-and-critical-inputs (accessed 12.11.2025).
[34]https://qualitymatters.usp.org/index.php/over-half-active-pharmaceutical-ingredients-api-prescription-medidines-us-come-india-and-european (accessed 12.11.2025).
[35]https://waysandmeans.house.gov/wp-content/uploads/2024/02/Schondelmeyer-Testimony.pdf (accessed 12.11.2025).
[36]https://www.federalregister.gov/documents/2025/04/16/2025-06587/notice-of-request-for-public-comments-on-section-232-national-security-investment-of-imports-of (accessed 12.11.2025).
[37]https://api.omrglobal.com/chinas-api-industrial-2025-fueling-global-pharma-with-scale-and-precision/ (accessed 12.11.2025).
[38]https://www.drugpatentwatch.com/blog/the-dragon-awakes-charting-the-unstoppable-growth-of-chinese-pharmaceuticals-in-the-global-market/?srsltid=AfmBoorz-x9KVXgqOu9Wjc Y9sEpo7OqJQdaEvdci-rJe0D3gObeFexO (accessed 12.11.2025).
