China is becoming an increasingly competitive environment due to ongoing price competition, and numerous Governmental price cuts. Unless manufacturers have Chinese based manufacturing plants, which can produce, generic drugs at low-cost, there is little financial incentive or future prospects for any foreign companies in the generics market.

The long-term potential of the Chinese pharmaceutical market is huge, given its large population, ongoing healthcare system modernisation and economic development. China is both a large importer and exporter of medicines, especially of active pharmaceutical ingredients (APIs).

China has become an attractive destination for R&D as new opportunities have emerged following its WTO (World Trade Organization) accession. Development has accelerated both industrially and scientifically, and today the Chinese pharmaceutical market is worth around $US12 billion.

Factors fuelling the developmental growth and attracting foreign investors to the area include low labor costs, high quality clinical data and an abundance of R&D collaborative opportunities and facilities.

Global biotechnology within China has also undergone significant growth, promising enormous potential for new companies. Biotechnology companies in the country have already grown quicker than pharmaceutical companies.

The Chinese government also plays an instrumental role in the pharmaceutical development of China. The introduction of WTO guidelines and protection for intellectual property rights has caused a shift in the company structures of China, forcing some to close business or enter into new collaborations.

The Chinese government also plays an instrumental role in the pharmaceutical development of China. The introduction of WTO guidelines and protection for intellectual property rights has caused a shift in the company structures of China, forcing some to close business or enter into new collaborations.

Major players include Shandong Qilu Medicines, Shanghai Pharmaceutical Group - Asia Pioneer, Shanxi Pude Pharmaceuticals,  JL Weiwei Pharmaceuticals, Guangzhou Tian Xin, TH James-Andy, Shandong Lunan Better Pharmaceutical, Chongqing Yaoyou Pharmaceutical Company, Shandong Reyoung Pharmaceutical Company and many more.

With improvements in intellectual property regulations, Government funding and the growth of tax incentivized Special Economic Zones, China's R&D environment is developing fast. Manufacturers around the globe are increasingly looking towards China as a place to conduct drug discovery and clinical trial research, although a number of challenges still remain.