Rally in Chinese healthcare signals a structural shift, not a fleeting rebound

CHINESE healthcare is leading Asia’s capital markets in 2025, transforming from a domestic growth story into a global force in innovation and investment. This rally has been anchored by blockbuster initial public offerings (IPOs) in Hong Kong, including Hengrui Pharma’s US$1.5 billion listing and DualityBio’s oversubscribed debut, which together highlight the depth of institutional demand and the sector’s growing role as a cornerstone of regional equity markets.

Both the Hang Seng Biotech and Healthcare Index have soared this year, rising 83 per cent and 74 per cent year-to-date, respectively – dwarfing the broader Hang Seng Index’s 27 per cent gain.

More than a cyclical rebound, this momentum signals the start of a structural shift. The healthcare sector is emerging as the frontrunner in driving innovation, attracting investment, and shaping market leadership, not just in Asia but globally.

Chinese biopharma companies now outnumber US peers among the world’s top 50 drugmakers by number of innovative drugs in clinical development – an important milestone that underscores the country’s global competitiveness.

For Singapore-based investors, these trends are not distant. Hong Kong’s equity market remains a key gateway for South-east Asian capital into China, and Singapore has become a regional hub for healthcare listings, with at least five Chinese and Hong Kong healthcare companies working towards IPOs, dual listings or share placements on the SGX in the next 12 to 18 months.

The outperformance of Chinese healthcare creates opportunities for Singapore institutions to diversify exposure, while strengthening the city-state’s role as a conduit for global capital into Asian innovation.

Several structural factors could explain why Chinese healthcare and biotech are outperforming:

1. Global investability of Chinese biotech

Despite geopolitical and trade tensions, biotech remains one of China’s most investable sectors. Foreign ownership of Hang Seng Biotech Index constituents has climbed to about 42 per cent over the past year.

The sector’s value is underpinned by intellectual property, research and development excellence, and structural advantages in clinical and business development – factors largely insulated from external disruptions.

Regulatory alignment with global standards, such as US Food and Drug Administration and European Medicines Agency pathways, further strengthens the case for global investors.

2. Global pharma’s deepening engagement

Multinational pharmaceutical companies are increasingly pursuing an “in China for Global” strategy, recognising the international competitiveness of Chinese innovation. In the first half of 2025 alone, over 60 out-licensing deals were completed, already surpassing 2024’s full-year deal volume and value.

Notable transactions include Pfizer’s acquisition of global ex-China rights to 3SBio’s bispecific oncology asset for US$6 billion and AstraZeneca’s multi-billion dollar collaborations with CSPC across multiple therapeutic areas. This signals a shift in the lens through which MNCs are viewing Chinese biotechs – from previously prioritising cost-focused partnerships to now viewing Chinese innovation as globally competitive.

3. Efficient clinical execution as a core differentiator

China’s clinical ecosystem is one of the world’s most efficient. A large, concentrated patient population, rapidly expanding certified trial sites, and adherence to ICH guidelines enable patient enrolment at speeds up to five times the global average.

Leading biotechs focused on GLP-1 (glucagon-like peptide-1, controlling blood sugar and appetite) therapies are enrolling roughly 10 patients per site per month, compared to an industry average of just two. Combined with lower operational costs, this efficiency significantly enhances the attractiveness of Chinese clinical assets for global collaboration.

Looking ahead

China’s healthcare sector is advancing rapidly across modalities, from antibody-drug conjugates to bispecific antibodies, molecular glues and more. While the market may continue to fluctuate, the long-term fundamentals – sustained innovation, global capital engagement, multinational partnerships and clinical strengths – remain robust.

For investors and policymakers in Singapore, the key takeaway is clear: Engaging early with this structural shift offers the chance not only to capture returns, but also to anchor the region’s role in shaping the future of global healthcare.

The writer is chief executive officer at CBC Group, a healthcare-focused investor-operator