The China Health Pulse Podcast

The Politics of China's Health, At Home and Abroad - with Prof. Yanzhong Huang, Council on Foreign Relations

🎧 [https://emojipedia.org/headphone] Here on https://chinahealthpulse.substack.com/s/podcastThe ChinaHealthPulse Podcast [https://chinahealthpulse.substack.com/s/podcast], I chat in depth with the real experts who have dedicated years to working in and with China’s health - across policy, industry, academia and well beyond. Our candid conversations aim to provide you with real insight into how care is delivered, how decisions are made, and why it all matters, far beyond China’s borders. Watch or listen here on Substack [https://www.chinahealthpulse.com] or Youtube [https://www.youtube.com/@ChinaHealthPulse], and/or subscribe on Spotify [https://open.spotify.com/show/4LLRGIauUUG3A5I2YbduMb?si=58dcc45ba3214793] & Apple Podcasts [https://podcasts.apple.com/us/podcast/the-chp-podcast/id1844027762]. These newsletter posts provide all links, plus a full text transcript of each episode. This past month, China’s role in global Health was more visible than ever. The 79th World Health Assembly [https://www.who.int/about/governance/world-health-assembly/seventy-ninth] was held in Geneva last week, bringing governments into the annual forum where health policy financing, technical cooperation on health and diplomacy collide. For countries all around the world, the WHA is much more a health meeting; it’s also a test of how nations can present themselves inside the multilateral institutional platform and how they handle sovereignty questions, how they talk about development and how much global health leadership each nation is aiming for. And for China, certainly, it was a really important platform. The week prior, in mid-May, President Trump visited Beijing for a high-profile summit with President Xi Jinping. [https://www.ft.com/content/7ae6a01d-df8d-4148-8424-27272e63939d?syn-25a6b1a6=1] And though health may not have been the headline issue, it is a topic that underlies so many of the difficult questions within U.S.-China relations today, whether that’s drug supply chains, biotech competition, health data and disease surveillance, or tariffs or aid or trust. And if we go back a little further, to March earlier this year, and the Two Sessions [https://www.chinahealthpulse.com/p/beijings-spring-spectacle-12-what], China’s annual plenary. This year, China’s 15th Five Year Plan [https://english.www.gov.cn/2026special/2026npcandcpcc/6979af4fc6d00ca5f9a08cd6] was delivered, and it showed how much pressure China’s domestic health system is under, whether that’s hospital reforms, ageing, long-term care, rising chronic disease burdens. These health policy challenges are part of much larger domestic themes around how China aims to govern healthcare, cost, technology, and social stability at the same time. This episode is a chance for us to step back from all of those headlines and events and ask: what does Beijing actually want from healthcare now? i.e. the policy logic underneath both China’s domestic and international health strategy. To help make sense of this, our guest Professor Yanzhong Huang [https://www.cfr.org/experts/yanzhong-huang] is one of the leading scholars of China’s health politics and governance, global health security and US-China relations. He looks at China’s health policy through institutions, incentives, state capacity, trust, bureaucracy, international relations and security, connecting all of these dots across both the domestic and the international in a way that many health discussions on China miss. Professor Huang is a Senior Fellow for Global Health at the Council on Foreign Relations [https://www.cfr.org], where he directs the Global Health Governance Roundtable Series. He is Professor on Global Health at Schwarzman College [https://www.schwarzmanscholars.org] at Tsinghua University [https://www.tsinghua.edu.cn/en/], and also Professor and Director of Global Health Studies at Seton Hall University’s School of Diplomacy and International Relations [https://www.shu.edu/diplomacy/], where he developed the first academic concentration among US professional international affairs schools focused specifically on the security and foreign policy dimensions of health. Professor Huang has testified before US congressional committees multiple times and is regularly consulted by media, government, industry, and NGOs on global health in China. He is the author of several major works, including Governing Health in Contemporary China [https://www.routledge.com/Governing-Health-in-Contemporary-China-1st-Edition/Huang/p/book/9780415498456], Toxic Politics: China’s Environmental Health Crisis and its Challenge to the Chinese State [https://www.cambridge.org/core/books/toxic-politics/4ABF95F247347927715364ADF5A9A94D], and The COVID Pandemic and China’s Global Health Leadership [https://www.cfr.org/reports/covid-19-pandemic-and-chinas-global-health-leadership]. He is also Founding Editor of Global Health Governance [https://blogs.shu.edu/ghg/], the scholarly journal for the new health security paradigm. Watch/listen/read on Substack [http://www.chinahealthpulse.com], on Youtube [https://www.youtube.com/@ChinaHealthPulse], or subscribe to the audio podcast on Spotify [https://open.spotify.com/show/4LLRGIauUUG3A5I2YbduMb] and Apple [https://podcasts.apple.com/us/podcast/the-china-health-pulse-podcast/id1844027762]: Read our Conversation: (Audio transcript adjusted for clarity and flow) 1. China’s Health Ambitions & Challenges Ruby: Let’s start with the big picture first. When we look at China’s health system in 2026, what do you think does the state want from healthcare now? Is it being treated as a public service, a social stability issue, an innovation engine, a fiscal challenge, a governance test? Or is the challenge that it is all of these things at once? Professor Yanzhong Huang: Well I think if you want to single the most important tension and challenge for China’s healthcare system, in 2026, it all boils down to this challenge, that is: China wants a developer ward health system at a developing country price. But rather than to significantly invest in its healthcare system, for example, it makes its hospitals earn their own cap. So once you see that one choice, (it leads to) almost everything else that people worry about: the inequality, the corruption, the over-treatment, the stunted private sector, all if it starts to look like a consequence of that. Certainly, the government ambition is enormous, Healthy China 2030 [https://www.who.int/teams/health-promotion/enhanced-wellbeing/ninth-global-conference/healthy-china] aims to raise China’s average life expectancy to around 80 years old by 2030, to cut claims coverage above 95 per cent, pushing to lead in biopharma and AI. But if you look at how much China has spent, it is only around 5 per cent of GDP on health. That is well below what countries with those ambitions usually spend. How do you square that? Not by writing big checks to hospitals, but by telling hospitals to go find the money themselves. A couple of weeks ago I was in my hometown, meeting with the director of the county hospital. I was told that the direct government funding was about 1 per cent of the total revenue, which was roughly 600 million yuan. What is that institution really? A public hospital that behaves like a business, or a money-making machine, if you will. Remember in China, public hospitals provide roughly 80 to 90 per cent of the hospital services, China has imported the incentive of the market, to chase revenue, chase volume, chase the demand, into a system that is still publicly owned but without the discipline a real market imposes. So you get the incentives of the market without its accountability and the ownership of the state without its funding. That is like the worst of both worlds, right? I think that is the major challenge. Just to give an example of the potential consequences. A relative of mine had cerebral haemorrhage last month and needed emergency surgery. The bill was about 100,000 RMB. She is covered, she is insured, but after reimbursement, she was still left paying close to an entire year’s average raw income out of pocket. So the gap between covered and protected - it’s enormous. There’s still a threshold beyond which ordinary families simply fall through. You might call this China’s key line. 2. China’s 15th Five Year Plan Ruby: Bearing in mind China’s persisting challenges, gaps in access, cost inequalities. The Two Sessions in March gave us the 15th five-year plan, the forward-looking five-year blueprint vision of what China wants to achieve across all sectors, including on health care and social welfare. From those health signals, which priorities do you think outside observers should take seriously? And which ones might feel more like repeated policy language that might be harder to translate into real change with time? Do you think we’re seeing a new phase of health reform or continuing unresolved persisting problems as the fiscal demographic and pressures that you mentioned, continue? Yanzhong Huang: Honestly, I think most of what gets announced at the two sessions on health is continuity, or you might call it a gradual approach - essentially, the same '‘Healthy China” language year after year. So the useful question isn’t “what did they say”, it’s “what actually it signalled”, and this year, there are two (areas) that I believe are worth taken seriously. The government is admitting that the basic public health insurer, the health insurance, has hit a ceiling, so it’s doing two things: building rails for private money to share the load, and concentrating the scale of public money on the demographic emergency. The first one, the outside observers tend to most underrate, because it sounds technical, but it isn’t. For the first time, commercial health insurance showed up in the government work report. Premier Li Qiang said that the government would move faster to develop it. In January, China launched its first ever commercial health insurance drug list, [https://english.www.gov.cn/news/202512/07/content_WS6934f5f6c6d00ca5f9a07f64.html] the so-called “Category C” list, sitting deliberately outside the basic health insurance catalog, and designed to capture the expensive, highly innovative drugs the public fund can’t afford. So it is simultaneously a confession and an invitation: the confession because the basic insurance can no longer pay for everything, the invitation, to the private sector, here is the official reimbursement pathway for premium medicine, so go and build a market. So for pharma and insurers, that’s the most consequential thing from the Two Sessions. And the second signal is the demographic pivot. That’s where the real money is moving. The government announced that measures to improve total fertility rate to a national child care subsidy 3600 RMB a year per child aged under three. That is around 90 billion RMB of central government money, reaching over 20 million families. They also announced a goal of making basic childbirth essentially free, and even more interesting, assisted reproduction. In-Vitro Fertilisation, IVF, now is covered by insurance in all 31 provincial regions - that was unthinkable, a few years ago. These are some very interesting signals, but cash baby bonuses have a weak track record everywhere, because fertility essentially doesn’t respond much to a few thousand RMB when the real cost we know is more about housing, education, and careers, right? So birth rebounded slightly to about 9.4 million in 2024, but the trajectory is still down, China’s new birth population this year is still dropping. to the 1939 year level. So is this spending demographically effective or just the politically necessary? My read is the latter, dressed as the former. I would really be interested in watching the long-term care insurance, well the structural one. China keeps calling it the sixth pillar of social insurance, but the financing has never been resolved. If they solve that, it’s going to be a game changer. If they fail to, then families will keep bearing the full financial burden of an ageing population. Related: 3. Financing and Insurance Ruby: that was exactly going to be my next question! On how financing and insurance might solve China’s demographic challenges. Yanzhong Huang: We cannot answer this without the long view, right? Because the tension I just described, of the hospitals being told to fund themselves, is not a 2026 invention, it was a choice China made in the 1980s when it marketised healthcare and cut direct funding and told hospitals “you are on your own”, to make up the differences. That was when the rural co-operative system collapsed, and this “affordability and access” problem entered the language. So the core problem is already about 40 years old. There have been genuine attempts to to fix those problems. In 2009, the government launched healthcare reforms and committed an extra eight 850 billion RMB, that’s about 124 billion US dollars. That’s how they expanded coverage, from a minority, to over 95%, so anyone who says China never funds health is wrong. But here is the catch: that money unfortunately went mostly into the demand side. It expanded who was covered, but what it did not do was fix how public hospitals are financed. That was always the harder second phase and that has never been delivered. The government leaders and the decision makers recognise that problem. They always say that hospital reform is the core of China’s healthcare reform. But so far, they have left that structural part untouched. We’ve also seen since 2018, China created the National Healthcare Security Administration, the NHSA. [https://www.chinahealthpulse.com/p/chinas-health-ministries-pt-3-who] For the first time you have a single powerful buyer with enormous leverage over prices, but shifting from passive paying bills to what they call “strategic purchasing” [https://www.chinahealthpulse.com/p/making-sense-of-this-years-national]. This is how the VBP, volume-based procurement, DRG (diagnosis related groupings), and DIP (Diagnosis-Intervention Packet) payment reform became relevant. It is a sophisticated modern toolkit that didn’t exist 15 years ago - but here’s why still I came down with some kind of pessimism: every one of those tools is a cost management device, and not one of them touch this original choice, There is this continuous reluctance to fund the public hospital delivery from general revenue. Even though the state is becoming more sophisticated and managing the symptoms of the 1980s decision, they never revisited that decision. So it’s essentially like new bandages on a very old wound. 4. Primary Care and Hospital Reform Ruby: That’s a very appropriate medical metaphor. Focusing a bit more about the hospital structure that China is struggling with: this focus still on tertiary centres, difficulty in balancing public hospitals that act like private businesses, private hospitals and the commercial drug reimbursement list [https://www.chinahealthpulse.com/p/making-sense-of-this-years-national]that’s being implemented now, There’s also the patient and consumer demand side where Chinese patients to generalise might still prefer larger hospitals and specialist centers over going to local community centers, primary care clinics, which they might perceive or actually might in reality still be lower in quality, have lower capacity than the specialist centers. So can you share a bit more about how that progression is transforming, how China viewed primary care reform maybe 10 years ago compared to today, why it’s remained so difficult and the role of technology making a difference in how patients access tertiary centers, maybe skipping over primary care even, and that behavior, that trust, ⁓ and how that kind of interacts with the deeper structural issues. Yanzhong Huang: the issue is still related to that question of the public hospital reform. essentially, if you are a medical student, and you finished your medical school. You’re hired by, let’s assume, a township health centre. You have a basic salary, but the demand for services is very low, because people prefer the tertiary hospital service or even urban health centre service to a township health centre. So you really don’t have the demand, and without the demand you end up only being paid your basic salary, no bonuses, so there’s no real incentive (for you as a doctor) to stay at the grassroots level, so you would try your best try to get hired by a county hospital or urban health centre to get better paid. Eventually this creates this vicious cycle of a quality issue at the grassroots level. It affects people’s incentive to seek treatment there. there’s a trust issue certainly. people would prefer but to go to the urban health centers, including the county hospitals, this reform trying to Than keep those those basic services being provided at the grassroots level is not quite successful, I think. Related: 5. Central Policy vs. Local Implementation Ruby: And that top-down, visionary, long-term governance, blueprints, initiatives versus implementation on the ground, how incentives of different institutions or even incentives of local governments. The ideology or the theory, versus the practical implementation - bearing in mind all of these different agendas and challenges. Does the China context makes all of that more difficult because of the diversity on the ground - or actually does it makes it all a bit simpler than in other countries, because of the central role of governance in driving change? Yanzhong Huang: I think the key thing is this gap between central policy design, the local delivery right in Chinese health sector, it’s not a failure of implementation. It is the actual building to that architecture or that institution. We can talk about this fiscal decision made in 1994 when Zhurong Ji was the Chinese premier - China did a big tax sharing reform that pulled the revenue up to the central government, but left the spending responsibilities. We’re talking about 85 per cent of the spending responsibilities down at the local level. So Beijing collects the line’s share of the money, but local governments from provinces to counties have to actually deliver health education, social services. The policies are designed in Beijing, but the bills are paid in the counties. This sounds very simple, but that is why I tell people not to talk about the Chinese healthcare system as if it’s one thing. It’s actually thousands of local systems with widely different capacities. Insurance was historically poured at the city or even county level, so a rich coastal city and a poor inland county each run their own fund. A wealthy municipality can offer generous reimbursement, although that seems to be becoming increasingly difficult given the sluggish economy. A struggling country with an older, sicker, poorer population can barely keep its bonds sovereignty, so the same national policy could produce completely different reality, but in China, the centre is now pushing to pull at the provincial level to even this out. I think this is a sensible decision, but implementation is slow because richer areas don’t like this idea of subsidising poor ones, But with that being said, some of those decentralisation measures are deliberate and smart. China is huge and diverse, and leading localities experimenting has been a real strength. A lot of that I wouldn’t necessarily call the best, but good reforms have started at local pilots that have then scaled. The problem here is that such experimentation becomes a feature when localities have resources, and a bug when they are just handed obligations they can’t fund - but increasingly the second seems to be the case. There are also two practical rules we need to keep in mind. The first is that we need to discount a central announcement by the local fiscal capacity, because the policy is only as real as the poorest country’s ability to pay for it, And second, we need to watch the transport payments and the polling reforms, and not just the headline policies, because the real question is never what Beijing actually wants, it’s whether the money flows down to where care is delivered. Related: 6. Health as Core Governance Ruby: In terms of how the health sector in China influences social policy and economic policy, as a core pillar and as an opportunity area, compared to in other countries e.g. UK, where health as a public sector service is often viewed as one which absorbs costs rather than creates opportunity. Can you analyse the viewpoint from the state in China and how it delivers health governance and policy in such different ways? Yanzhong Huang: The Chinese healthcare system, it’s different from in many countries. The public hospitals have a commandingly high proportion, even though number wise, they’re outnumbered by the private sector, but 80 to 90 per cent of the services in China are still provided by the public hospitals. And the government has made it clear, in terms of rhetoric, that public hospitals are supposed to show the so-called “public benefit'“. But in reality, because the government only fund a very, very small percentage, a fraction of the public hospitals revenue, they instead ask them to make money themselves to cover their spending, transforming those hospitals into a money making machine, that has not been changed. That is very different from many other countries. I think biggest problem here when people talk about public hospital reform, even though it’s identified as a priority for many years, the biggest challenge is that you cannot change one incentive in isolation because they’re all wired into a single circuit. And that circuit traces back to the financing problem we keep hitting. For decades, Chinese public hospitals could add a 15 per cent markup on the drugs they sold. That’s how they made up for the government not funding them. For a time it was about, 40, even sometimes 45 per cent of hospital revenue, that came from selling drugs. So the predictable result was massive overprescribing. The government they abolished that nationwide by implementing that zero markup policy. This is a good thing, right? It’s well intentioned. But here is what happened. Drug revenue went down as designed, but total cost to patients didn’t fall that much, because the hospitals, which still had to fund themselves, just shifted that revenue seeking elsewhere. So suddenly you see more medical tests, more imaging, more high-tech procedurals, more billable services. The zero markup didn’t reduce the underlying behaviour, it just moved it from one revenue stream to another. So you squeezed the balloon on one end, and the budget on the other. This is sort of like a whack-a-mole approach essentially. 7. Affordability vs Innovation Ruby: I wanted to ask about this difficult balance that we’re seeing now between China’s priorities in trying to promote affordability and address the persisting inequalities and promote access to care for more of its population.But at the same time, innovation - whether that’s biotech and drug development or health technology and digital health - that’s a huge priority for China right now, too. And we’ve seen that again in the 15th five year plan. Innovation, especially frontier cutting edge innovation, costs a lot. And these companies developing that innovation need funding to remain sustainable. So there’s this paradox between affordability in healthcare versus increasingly expensive front-end innovation. The biotech industry in China is struggling with this. And that’s one of the reasons they’re also moving overseas to look at the potentially more lucrative US market. So domestically, in China, what do you think about this difficult balance? Yanzhong Huang: Well I think supporting innovative drugs, devices, AI, digital health, and they was to trying to improve access, they might be two different dynamics. We tend to describe this as a sort of elegant loop, where you crush old generics with bulk-buying and public-private partnerships and recycle the savings into the shiny new drugs and then squeeze the commodity end, to then fund the frontier. But they’re really two separate engines. On the one hand, you have this brutal cost control machine, but on the other there’s a genuine innovation boom. The link between these two is not very clear. For example cost control works on price almost too well. Winning bids for the National Drug Reimbursement List [https://www.chinahealthpulse.com/p/making-sense-of-this-years-national]are roughly 60 to 80 per cent below the old price, sometimes over 90 per cent. Generic aspirin went for about three cents, right? That costs less than packaging. But this past year it bit down on the quality and trust. You might have read how a senior surgeon at Shanghai’s regional hospital, talked about how some domestic generics are simply not performing: blood pressure drugs not controlling hypertension, and anaesthetics not putting patients under. And because the the foreign originals by Pfizer and AstroZeneca can (and have to) match the prices, they’re vanishing from hospitals’ shelves, so regulators had to fly to Shanghai to calm it all down because this could potentially become a social stability challenge. So cost control has a real ceiling. How long can you push price before you lose quality and the trust of your own doctors? Then, the innovation boom to me is like the second engine. Here, the crucial correction is that China did not get there by recycling generic savings. You get there by deliberate, decades-long state strategy. And the 2015 regulatory overhaul cleaned out fraudulent trial data and slashed approval times, then the whole nation system, where biopharma was named the strategic sector, talent repatriation enabled trial machine that’s now the world’s largest - over 7,000 trials a year, at a fraction of the US cost. This booming Chinese biotech, biopharmaceutical industry, It’s a record $136 billion in outlicensing deals in 2025. That’s nearly a triple by the year before. So now China is second in the world, the first to launch new molecules. And that is why Pfizer’s CEO warned that for the first time in decades, American biotech dominance is being seriously challenged by China. So, how do the squeeze and the boom connect? I think it’s almost the opposite of this story. The domestic price war is so brutal, and there’s so much Me-Too over-capacity, for example, 20 drugs approved in a single cancer immunotherapy class, margins at home collapse, that pushes firms to outlicense to the West and chase the US market because they cannot own at home. So those innovations, essentially a lot of that stays bordered at home or gets sold to Western partners, rather than reaching the world as Chinese products. That is the unfortunately the case, but the shining spot here is that constraint becomes an advantage. With AI in the system short of doctors, dig hard on cheap software, and Deepseek was running in around 90 top hospitals within weeks of release. Ruby: I definitely agree with you. The innovation story and the health access story are two separate pieces. And I think the way China views its science and drug innovation as a source of pride and urgency, it does seem quite separate from this affordability access issue. When I was in Beijing last month, I caught up with some health ministry officials, and to them, it’s very simple: in the China landscape, affordability and accessibility is key. So whether you’re a domestic biotech company or a foreign company, if you want your drugs to be bought and taken by Chinese patients. you have to fit the rules. You have to cut the prices. They’re not going to give you any leeway or benefit, even if you’re struggling. That’s the cost of playing in the Chinese market. Related: 8. US-China Health Relations Ruby: Now, on China’s cross-border role, firstly about US-China health relations, for which Professor Huang, you’re one of the leading experts, you’ve written and analysed this topic so extensively. Health used to be recognised as perhaps a softer or safer area of cooperation. Naturally, everyone agrees that longer, healthier lives are important for all populations. But somehow that feeling is perhaps less true now in certain circumstances, with drug supply chains, biotech competition, health data, disease surveillance, tariffs, even, the sensitivities of the COVID pandemic and what that means for future disease risks. Trump had a recent visit to Beijing in May. How have you been monitoring health within the US-China geopolitical relationship? And how does that feel when you talk to US policymakers versus then when you’re back in China and Beijing? Yanzhong Huang: Certainly fentanyl, that is a major concern, if you can consider that as part of the US China Health co-operation. The momentum has continued under Trump, and certainly China also has incentives to pursue that co-operation because it could be some kind of leverage for the US to collaborate in other areas. But the other one the US would prioritise would be the biotech issue, right? This concern about over-dependence on Chinese APIs, active pharmaceutical ingredients, key starting materials. And now the innovative pharmaceutical products, because the Big Pharma are now facing patent cliffs, they badly need rely on China for new innovative products, but in the meantime they’re very concerned that China might leverage rare earths in their talks. Both the United States and China are certainly aware of that leverage, though so far they haven’t really weaponised it, but US policy thinktanks are very concerned that could be a “nuclear” option that China could leverage in the future within the bilateral relationship, and are calling for securitising US supply chains and also potentially imitating China’s industrial policy. This again is unfortunate, because if they collaborate with each other, globalising the supply chain, that would be a win-win. But if you both invest in securitising that, it’s going to be very costly. Ruby: Right, it’s a thorny issue. In terms of the biopharma companies, their incentives - whether they’re multinationals, they’re labeled as “US”, or now we have BeOne [https://beonemedicines.com] and others as “Chinese biopharma” multinationals popping up - multinational companies are only ever loyal to their home country when it’s strategically useful. Otherwise, what they care about is sourcing the best assets from anywhere around the world, and then selling that anywhere around the world. That is always interesting to remind ourselves of. I guess policymakers it’s easy for them to assume that American pharma companies are loyal to the US, when they’re not necessarily so. Yanzhong Huang: Basically there’s a trade-off in what the decision makers: investing right in building or improving the bilateral relationship, the marginal cost of doing that vis a vis the marginal cost of investing or securitising the supply chain to avoid dependence on the other side, which one would be more cost effective? I think that is this is a very important question they have to address before making any decisions. Related: 9. Global Health Governance Ruby: And then, from a global health, multilateral lens. So the World Health Assembly takes place every year, usually in May, and the 79th WHA was the third week of May, the 18th to the 23rd. And as always, it’s a “pomp and circumstance” platform where diplomats on stages read off their lines and talk about cooperation and influence and addressing shared challenges. But last year, the 78th World Health Assembly was regarded quite strongly. Big moves were made. [https://asia.nikkei.com/opinion/china-rewrites-global-health-leadership-as-us-retreats-from-who]The US left the WHO, USAID more broadly retreated from the global health development landscape, and then China became the World Health Organization’s largest donor, and brought the largest delegation. You’ve written about this in foreign affairs. I was also viewing the landscape very keenly and writing about it too. Can you share what happened this year, and what China is trying to achieve now on the global health stage as it works with developing countries more and more? Yanzhong Huang: Last year, China sent a 130 member delegation when the US officially was still there, but this year the US was no longer there and didn’t send an official delegation, and China sent a 100 member delegation. I was wondering if the number of people they sent had anything to do with US withdrawal, as China is naturally now the largest state donor, so they no longer need to really care about the US competition, and they’re actually sending a smaller, delegation there? The expectation last year was hoping that the Pandemic Accord, its appendix, the PABS (Pathogen Access and Benefit-Sharing System) approval for signature progress was very slow, still subject to negotiation. And then you have this concern about the Ebola outbreak that is clearly not under control yet, I don’t think it’s going to develop into a pandemic, but the WHO has announced it as a public health emergency of international concern. We’re institutionally not really well prepared for such a pathogen with pandemic potential, in a way, I think we’re even less well prepared than we were in 2019 before the COVID-19 pandemic. Certainly, there were geopolitical tensions during the Cold War era in the USSR confrontation, but even in spite of the confrontation, still they were able to cooperate on health issues, on polio eradication, on smallpox eradication, primary health care. But the geopolitical tensions now, it’s become a major factor hindering by the US-China relationship. There’s no serious government-to-government dialogue, right? Trump was talking about the G2 (Group of Two) structure [https://www.foreignaffairs.com/united-states/g-2-reality], between the US and China, but how is G2 supposed to cope with major global health challenges like Ebola? We saw in 2014 that US and China worked hand in hand in Western Africa dealing with Ebola, but I’m still not seeing any US-China cooperation now in dealing with Ebola in Congo and Uganda. So that I think should be a litmus test on the so-called G2 structure. Then, if you look at the Chinese contribution to WHO last year, it became headlines when China announced 500 million USD funding to WHO over the next five years. but now it seems increasingly clear that’s more like a PR victory for China than actual donations. Most of the money actually will be the assessed funding that China will pay anyway for the next five years. China paid eighty eight million last year, and if you consider the 20 per cent increase, that’s close to one hundred million a year. So in five years, that’s close to five hundred million. It’s not voluntary contributions, so it would be correct to say that China becomes the largest state donor. Related: Ruby: And then, at the World Health Assembly or otherwise, China is optimising these multilateral platforms and selectively participating where it’s beneficial, but also using those opportunities to deliver bilateral health objectives. side events, side meetings with developing countries.or on the ground, e.g. in the African continent in Southeast Asia and LATAM, bilateral health partnerships, which are often private-public partnerships, industry and gov together, which then actually oftentimes the local partners quite like as well, because perhaps it’s more transparent, even if it’s more transactional, built on mutual gain, mutual capacity building, mutual prosperity, building economic strength, development strength, the nation’s strength, as well as global good. This is a very different angle from the traditional global health and international development space that Western institutions, Western nations tended to operate along. Yanzhong Huang: I remember years ago there was a leading Chinese scholar who basically said that the most important contribution China could make to global health is to '‘take care of our own business”. This suggested that domestic health care remained a priority. And certainly now, with the economic slowdown and then the reluctance to significantly invest in the healthcare sector in social security, Chinese contribution in terms of health related development assistance comparing with countries like the United States, it will remain modest. Actually if you look at the the health aid by the share of the total, Chinese foreign aid is a fraction of the total foreign aid. Even with the US withdrawal, I believe China still do not have a clear global health strategy, In terms of how to deal with US withdrawal, we do not see any significant increase of the Chinese health-related development assistance. In sub-Saharan Africa, we’ve seen some of the countries are hit hard by the US withdrawal, but we don’t see China stepping to fill the void. In Southeast Asia, we are seeing some efforts e.g. Cambodia, but there’s no indication to suggest China is willing to fill the void left by the United States. In fact, the head of the Chinese international development agency, CIDCA [http://en.cidca.gov.cn], made it very clear that “we don’t want to fit the US void”. China’s health aid might want to use it in a more strategic, selective manner, or just for helping achieving geopolitical and commercial objectives. 10. Predictions Ahead Ruby: To wrap up, what areas of focus will you pay attention to in this health governance space in terms of China? Yanzhong Huang: Well, I would pay attention to China’s role in the WHO, now the largest state donor, but there’s no Chinese national in the senior WHO leadership. I think China wants to play a more active role, but leadership composition suggests something different - and in the meantime WHO China has a soured relationship because of the original (COVID origins) probe issue. It would be more interesting to look at who would be the next WHO Director-General. I think the relationship won’t fundamentally change after Dr. Tedros steps down and you have a new DG. Second, I would also look at whether China is willing to significantly increase its health aid including to regions that are still a priority, like Africa, because we are seeing some interesting shifts of this priority in terms of health aid, moving from sub-Saharan Africa to Southeast Asia. But officially, China still identifies Africa as the priority, so unless they significant increase their overall health aid level, in practice, Africa would cease to be a health aid priority. Ruby: And then domestically, inside China? Yanzhong Huang: I would pay attention to how the government would respond to calls for investing more in social security, healthcare, compared with manufacturing, compared with high-tech self reliance. As long as consumption is not considered the top priority. then you don’t have strong incentives to invest in by those building a stronger social safety net or healthcare system. Watch or listen here on substack or Youtube [https://www.youtube.com/@ChinaHealthPulse], and/or subscribe on Spotify [https://open.spotify.com/show/4LLRGIauUUG3A5I2YbduMb?si=58dcc45ba3214793] & Apple Podcasts [https://podcasts.apple.com/us/podcast/the-chp-podcast/id1844027762]. Thanks for reading China Health Pulse! 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Investing in East-West Biotech: The 2026 State of Play - with China Biotech Dealmaker, Dr Leon Tang

🎧 [https://emojipedia.org/headphone] Here on https://chinahealthpulse.substack.com/s/podcastThe ChinaHealthPulse Podcast [https://chinahealthpulse.substack.com/s/podcast], I chat in depth with the real experts who have dedicated years to working in and with China’s health - across policy, industry, academia and well beyond. Our candid conversations aim to provide you with real insight into how care is delivered, how decisions are made, and why it all matters, far beyond China’s borders. Watch/listen/read on Substack [http://www.chinahealthpulse.com], on Youtube [https://youtu.be/8ojXzwyYYAQ], or subscribe to the audio podcast on Spotify [https://open.spotify.com/show/4LLRGIauUUG3A5I2YbduMb] and Apple [https://podcasts.apple.com/us/podcast/the-china-health-pulse-podcast/id1844027762]. It’s March 2026. Q4 2025 is done, full-year numbers are coming in, and annual reports shared through end-year earnings calls over recent weeks have set the tone for how biotech capital will move in 2026. We’re also a few weeks out from JPM 2026 [https://www.jpmorgan.com/about-us/events-conferences/health-care-conference], where there was even more China-West biotech deal chatter than last year, if possible. Now is therefore the perfect moment to zoom out and translate the noise into a clearer map: what is emerging across deals and financings, why they’re emerging now, what a ‘global-grade’ China-origin asset really means in practice. I can think of no one with a better read on the landscape from an investment point of view, than Dr Leon Tang [https://www.linkedin.com/in/leontangbiotech], one of the leading China biotech experts around, who sits closest to the investor and partnering circuits and always has his finger on the pulse. Leon brings almost two decades of experience in biomedical research, BD and investment. He is a founding partner of InScienceWeTrust BioAdvisory [https://www.iswtb.com], a biotech business development consulting firm that focuses on pharmaceutical licensing between the East and the West, which has advised over 30 clients ranging from Fortune 500 companies, world-leading investment funds, leading public and private biotech companies, and stealth biotech startups. He is the BD head of Mianus Accelerator [https://www.mianuscapital.com]– a new venture that aims to help Western biotech companies to access China’s world-class first-in-human clinical development capability. He is also the co-founder of the InScienceWeTrust Community [https://www.iswtc.org], an Asian-biotech focused non-profit, and one of the most active Asian biotech communities I know, with over 4000 active members across global hubs, including in North America and Europe. In addition, he is scientific advisor at BioSpark Group, with past lives in the venture capital and academic worlds. He holds a PhD in Biomedical sciences from the Icahn School of Medicine at Mount Sinai, a Master’s at Nankai University in Biochemistry, and a Bachelor’s from Tianjin University in biochemical engineering, and has published over 50 academic papers, including in Nature Reviews Drug Discovery and the Lancet Oncology. Read our Conversation: (Audio transcript adjusted for clarity and flow) 1. Setting the scene Ruby: Let’s get started by setting the frame. From your vantage point across networks and portfolios, including investors, BD teams and the wider biotech community, what feels most different right now, whether that’s compared with six months ago, a year ago or even further back? Leon: if you ask me what’s the biggest difference compared to what I saw six months ago, obviously I’m a little bit biased, always looking at a lot of stuff from the lens of Asian biotech, particularly China biotech. I would say that the overall industry, especially the Western side when they look at China, the sentiment is much more positive compared to six months ago. And if you go a little bit further back, even to one year ago, there was still debate whether embracing China was a good idea. There was an executive order rumoured from the Trump administration to ban the license deal from China to the US and so on. So that conversation and chatter is now much, much quieter today than before. In the meantime, I would that say since JP Morgan [https://www.jpmorgan.com/about-us/events-conferences/health-care-conference] in January, there’s a lot of high profile deals and collaboration. And the headlines announced really embrace the China biotech as an essential part of the global R &D ecosystem - through the deal making, through R &D collaboration, even through high profile big pharma executive visits. So I think that would be the biggest difference: the sentiment and also the action with China biotech is much more positive compared to six months ago and much, much better compared to one year ago. Ruby: And in terms of the recent end-year summaries from industry across biopharma, especially for those with China cash flows or China pipelines or cross-border ambitions, what have been the real questions for you underneath those very optimistic announcements, whether that’s real capital or real partnerships; opportunities and risks, things like that. Leon: In terms of cash flow, think there are very few China originated drugs probably except for Zanubrutinib (Brukinsa) [https://brukinsa.com] from BeiGene/Beone [https://beonemedicines.com], and Carvykti (Cilta-cel) [https://www.carvykti.com] from Legend Biotech [https://legendbiotech.com], who are making profit for Western companies. But most of others were only recently approved, and have not really reported revenue from the Western companies’ earning calls yet. I’m probably more focused on the deal making front, licensing deal or R &D collaborations. For dealmakers, there are always two parts. One part is really for your balance sheet or for your CapEx/upfront payment, and then the milestones, everything biobucks (contingent, milestone-based payments in biotechnology licensing or acquisition deals between large pharma and smaller biotech firms), that’s a different category, which is really important for the Chinese biotechs to talk to their investors, but not necessarily have an immediate impact with the earning calls every quarter. So focusing upfront payments, think if you look at all the deals since the beginning of 2026, the momentum suggests that this year can be bigger than 2025, which was already record breaking year in upfront payments. Biobucks has the same story. Last year, the global BD&L (business development and licensing), the licensed pharmaceutical space, China to West deals contributed to about 49% - about half the total deal value. As a comparison, in 2024, the United States were contributing about 50%, I think 47%. So from 2024 to 2025, the leader in licensing deals changed from United States to China. If you just look in the first two months of 2026 number already, China going to be dominant. It’s pretty clear. it continues. 2. Deal trends: Part 1 Ruby: In the pharmaceutical licenses you just mentioned, the big headline grabbing China-West partnership announcements that we’ve seen over the previous years, and then the burst of attention around January in San Francisco at JPM. In terms of organising the landscape then, what have been key patterns you’ve noticed in assets? any surprises or revisions in terms of modality, whether that’s ADCs versus bi-specifics, or clinical versus pre-clinical stage or buyer type - large foreign MNCs versus funds or other biotechs or even in structures for co-development or M&A, what they’re telling you about demand and innovation progress or pace and talent, or perceptions versus reality? Leon: This is probably gonna take two hours to answer to really give you a little bit of a reasonable description, so I have to force myself to three. The first one I would say is diversity. So the China-to-West deal right now is diversifying away from previously, which pretty much mainly focused on oncology licensing deals. Two years ago, that was pretty much the majority of them. But today is really different. Diversification in terms of disease area. Yes, oncology is likely still number one, probably not far ahead of immunology, if you look at recent deals in the first two months of 2026 . And also obesity is catching up real quick. The format of deals are also diversifying quite a bit: if you go back three years ago, most of the deals would be straightforward license deals. Right now it has so many different flavours (except for straightforward large ticket M&A, which is still not happening very often). Everything else is very similar to what you would say. You have a typical license deal with a preclinical phase one, phase two, phase three assay. Actually this week, Pfizer’s licensed a commercial-ready product from the China biotech Hangzhou Sciwind Biosciences,and I just saw the news that that asset was approved in China, shortly after the deal was closed. So right now Pfizer is a commercial obesity company. So they have a commercial product on the market as of today, because they licensed a late stage asset (Ecnoglutide, a GLP-1 drug [https://www.fiercepharma.com/pharma/pfizer-breaks-obesity-market-china-approval-sciwind-partnered-glp-1#:~:text=Even%20though%20it%20is%20a,after%20it%20posted%20lackluster%20data.]) from China. But of course this asset was only approved for Chinese market. So that’s a new development: big Pharma licensed a late-stage asset only for China market! That’s one diversification. Another is: there’s a deal which even with the US biotech companies, rarely happens. Eli Lilly had a deal with Innovent [https://www.fiercebiotech.com/biotech/lilly-innovent-pen-88b-collab-moves-beyond-traditional-licensing], which is arguably the number one biotech based in China now, by market cap, because BeOne, or what used to be called Beigene, has become a Swiss company. So Innovent has become number one. Innovent and Lilly’s deal: if you look at it, there’s no asset transaction, but upfront payments of $350 million with up to more than $8 billion biobucks - one of the largest deal in 2026. And there were no asset transactions involved. What Eli Lilly really got from this $350 million down payment, is really to have the option to co-develop drugs from target nominations until phase two with Innovent, in oncology and immunology. So what Eli Lilly got is not a specific asset, but Innovent’s capability to develop drugs in immunology and oncology. And a similar situation also happened in the largest deal on record as of today, between CSPC and AstraZeneca. [https://www.astrazeneca.com/media-centre/press-releases/2026/astrazeneca-agrees-obesity-and-t2d-deal-with-cspc.html] That deal, the first half probably involves four assets in obesity, and the other half is the option to develop another four obesity assets they don’t even have yet. And that deal costs AstraZeneca over $1 billion upfront payment, up to $18.5 billion total value. It’s the largest deal out of China. So those also showed the diversification, also the confidence and the trust of big pharma like Lilly, like AstraZeneca. In China, biotech has the capability to develop drug from early stage all the way until phase two. I think that’s the first one. 3. Changing perceptions Ruby: We’re talking about not just partnering on assets, but partnering on capability, or even the last example you said, the potential for capability - not even capability realised. So all of these stages really showcasing a huge amount of trust and hope in what Chinese skillset and talent and capability can bring to the table. That’s such a huge transition in the recent years. It’s incredible. Leon: Right. But if we think about this happening exactly to some of Japanese and American biotech, I’ll give you two historic references. The deal Sanofi did with Regeneron [https://investor.regeneron.com/news-releases/news-release-details/regeneron-and-sanofi-launch-major-new-immuno-oncology], many, many years ago, Regeneron was a tiny biotech, it didn’t have the capability to do late stage clinical development, not even to mention commercial capability. That’s why they had this extensive collaboration with Sanofi. Sanofi’s best-selling drug on their pipeline right now, was originated from Regeneron, Dupixent/dupilumab [https://www.dupixent.com]. So you see the Chinese are following very similar footsteps as what Regeneron did, to become today as one of the largest biotech player in the world. Another example is the US’s Alnylam [https://www.alnylam.com], which had a lot of collaborations. One of the best cholesterol controlling drugs (Inclisiran/Leqvio [https://www.leqvio.com]) originated from Alnylam, went to The Medicines Company, then got acquired by Novartis [https://www.novartis.com/news/media-releases/novartis-successfully-completes-acquisition-medicines-company-adding-potentially-first-class-investigational-cholesterol-lowering-therapy-inclisiran]. That’s probably the most innovative commercial stage cholesterol controlling drug on the market. Ruby: Do you think it is because the momentum has built to a level where there is this trust that wasn’t there before? Leon: There’s trust, there’s also recognition of each other’ capability. It’s not like China never changed and all of a sudden the Western companies discovered them. It’s an iteration process. Let’s just use AstraZeneca, for example. I think they have around 14,000 employees in China, and I assume majority of them are ethnic Chinese, and were trained in China. But of course there must be a lot of their global talents that were trained or worked in different countries, a different culture background. A lot of them must come from Europe. The people are very fluid, they change jobs, over time, they’re going to build trust. Hengrui [https://www.hengrui.com/en/], they have a senior executive who recently joined. She was a senior executive at AstraZeneca. And Hengrui’s BD head was a former executive from the BD team at J &J. Henry’s BD team, most of them had worked in a Western big pharma biotech investment firm before. So they know how they’re connecting the trust, naturally exchanging on a personal level or professional level. Before any massive core development collaboration deal is announced, hundreds of billions of worth of asset transaction will have already happened. So the R &D team from, let’s say, Lilly and Innovent knew each other really well - actually Innovent received investment from Eli Lilly many, many years ago. So this deal is their seventh or tenth deal between Eli Lilly and Innovent. They start with probably a straightforward simple kind of, I sell you buy an asset, give you rights, that kind of simple integration, until right now it has become a full, almost marriage type of collaboration, a gradual build up. So I see this as a very natural integration of big pharma with a late stage clinical development capability and commercial capability and China based biotech company that really prove themselves, who are cost effective and deliver high quality early stage research in a lot of disease area. So I think it’s makes sense for both companies and for both sides. 4. Deal Trends: Part 2 Ruby: You mentioned there were three main types of trends and you talked about diversification first. Leon: Diversity application is one. The second one, I would say definitely the influx of Western investment fund. Obviously, there are a lot of geopolitical barriers. There were many Western investors in China, I would say five or 10 years ago, especially in biotech. And then a wave of them left China, and then there was like a “China Rehab” capital challenge. And now they’re coming back. There’s an incoming conference in late March called CHIC, the China Healthcare Investment Conference [https://www.chinahic.com] in Shanghai. The majority of their speakers are Tier 1 Western investment funds, senior investors. The Western investment fund are coming back. There’s Deerfield, there’s RA capital, there’s OrbiMed, there’s TCG Crossover Capital, you name it. Most of them are Western investors, most of them come from the United States, despite the uncertain US-China relationship. Despite all the geopolitical issues and the regulation and the government roadblocks, investors, are very, very pragmatic and resourceful. They figure out some way, because China’s early stage R &D capability just has so much more advantage compared to the Western biotech infrastructure or ecosystem. The investors just cannot let it happen without their capital. The third trend is really on the regulation front. China’s regulatory agency used to be called CFDA. That just tells you how much the Chinese regulators admired the (US) FDA! That’s the name, before they changed it into NMPA [https://english.nmpa.gov.cn], right? People used to say that China is a copycat. But guess what, the Chinese NMPA and Chinese government regulators are now coming up with new mechanisms. Now, China can do first-in-human or clinical trials so much faster and with so much flexibility, that its actually giving the US FDA a lot of pressure. This topic was brought up so many times in 2026. Albert Bourla, Pfizer CEO, talked about it [https://www.reuters.com/business/healthcare-pharmaceuticals/pfizer-ceo-says-us-pharma-industry-needs-collaborate-with-china-2025-10-15/], and the former commissioner of FDA, Scott Gottlieb talked about it [https://www.washingtonpost.com/opinions/2025/09/22/gottlieb-fda-drugs-discovery-speed-china/], publically criticising the FDA: “you are too slow, you are too bureaucratic, you are slowing down our biotech industry.” China has this unique system called the investigator-initiated trial (IIT). If you want to do, let’s say, AAV-based (adenovirus-associated) gene therapy for some rare diseases in the US, good luck! It’s very difficult. The FDA is going to require you to have a CMC package (Chemistry, Manufacturing, and Controls), prove you already have enough supply, you have a clinical GMP (Good Manufacturing Practice) facility, you have enough safety data, and you have protocol which costs tens of millions of dollars – all of this takes a long time. The investors and the biotechs are really miserable right now if they are in the gene therapy space in the United States. But in China, it’s very different story. China has this IIT (investigator-initiated trial) system really designed for cell and gene therapy, without having to have a full blown commercial GMP facility, without even needing approval from the NMPA regulators. If you have really encouraging data pre-clinically, and if you can really prove that it’s likely going to be very safe, with tremendous clinical benefit, then the hospital IRB (institutional review board) will green-light you, and you can get the trial done in a local hospital quickly. This has already happened: EsoBiotec, the Belgian company, were doing in vivo CAR-T for a lentiviral based candidate. They did their first [https://www.esobiotec.com/press-release-investigator-initiated-trial/] in human trial in China, and after just a few patient data, it looked really fantastic. AstraZeneca put down up to $1 billion to acquire the company [https://www.astrazeneca.com/media-centre/press-releases/2025/astrazeneca-to-acquire-esobiotec.html], and it became the first clinical stage in vivo CAR-T based on lentiviral vector in the world. As of today, big pharma has done five acquisitions of the in vivo CAR-T company. Based on public information and private information, I can tell you that the majority of them have already started or will start first-in-human clinical trials in China. 5. Deal pricing Ruby: You were dropping these very high value deal numbers, with a lot of money on the table. When you’re looking at this landscape, have you thought: this is underpriced, or they paid too much there? Is there a big difference between some of these deals in terms of how realistic they are? Leon: As a deal maker, I always think that the price is fair in that specific situation. The big pharma challenge is real, there’s a hundred billion dollars of patent cliff. The induced revenue loss is real. We all knew that Sanofi’s CEO Paul Hudson was on the way out. Every analyst will tell you the problem is, despite the revenue in recent years looking pretty decent for Sanofi, their patent-cliff problem was not being solved. That’s probably one of the major reasons he was asked to pass the baton to someone else So that’s a structural challenge for big pharma. They have to buy stuff, in-license new stuff, to maintain their pipeline and maintain their future revenue. With that being said, before, China biotechs were honestly not very savvy in terms of doing deals with Western big pharma or biotech. This why some people called it arbitrage opportunities, and pretty much we call it the “China discount”. But in 2026, all of a sudden, the China discount - at least look at those leading deals out of China - is totally gone. And instead of getting China discount, now you have to pay the “China premium”. It’s crazy! They actually compared the recent transactions, especially asset transactions of license deals with Chinese biotechs compared to other BD deals of the same period of 2026 with Western companies of the same stage, say phase one versus phase one, phase two versus phase two - then you pay more to get a Chinese asset. That’s a very interesting phenomenon, but of course, it is a little bit of FOMO. We know that a lot of big pharma right now have full-time employees of their BD team in China. One of the largest European pharmas has a BD team of 10 people based in China, go through all those Chinese assets, even talking to boutique Chinese companies. So as a deal maker, I always think: how can you get a good price if I have multiple bidders? It doesn’t matter if it’s Chinese asset, European asset, Indian asset or Singaporean asset, as long as you have, let’s say two or three bidders, you can use them against each other. You say that Party A gave me 100 million dollars, you have to match as Party B if you want to win. Pay more, it’s very straightforward. So because you have so many buyers in China chasing after the same hot assets, of course the price is gonna go up. Like I mentioned, the Chinese Healthcare Investment Conference, there are so many investors also chasing after early-stage Chinese assets, because typically big pharma don’t feel like taking such high risks. It’s going to be the investors doing that, but now, investors have to compete against each other for the same early stage assets, even if higher risk. So of course, early stage asset price is going to go up as well. It’s just competition in the marketplace. expected market dynamics. Ruby: So moving from China discount to maybe China premium, as you said, in some cases. there is all of this hype and an urgency to get hold of the right assets. But then at the same time, all of that perhaps is still sector specific. And in the general broader audience landscape, at least in media narratives and non-biotech specialist spaces, we’re still trying to convince everyone that Chinese biotech is even good enough quality or viable. So this widening gap between reality and the sector versus the general audience, I guess, that will just change with time as we see pipelines mature and patients actually taking these China origin medications, having their lives changed for the better around the world, then general audiences will start to see the evidence. And also, then, we’ll start to see the risks and the challenges come up as the reality lands. Do you find yourself a lot of the time still jumping between these two widening worlds? Leon: Honestly, the generalist is really not a serious player in biotech space. Even in the US, if you look at who is really driving the biotech industry, it’s really the specialists. The specialists have so much capital, they don’t necessarily need a generalist. Generalists are placed mainly in big pharma, if you ask those generalists in government fund, sovereign fund, or retirement fund, they manage a hundred billion dollars. They want to invest their minimal check size of $200 million. How many biotechs can take that? They can’t. So what general investors would do instead is to look to big pharma. That’s it. That’s what a generous investor, especially a public investor is really doing. Biotech is really driven by specialists. Now it’s even more clear. So I don’t really worry about retail investor in today’s situation .The science of biotech already complicated enough, and now you’re throwing in in China and geopolitical issues in it too. Honestly, I don’t recommend any generalist sitting in the US who doesn’t know any Chinese, to invest this sector. It’s too difficult! 6. Deal-making drivers: buy side and sell side Ruby: If we talk a bit more about your role as a dealmaker and in supporting investors on both sides of the world, can you take us behind the scenes - on the drivers, whether that’s on the buyer side, biopharma, big MNCs and top tier biotechs, what is changing in terms of how they search or screen? you mentioned marriage, decades long partnerships, slow building. But now that everyone’s getting conviction on China origin, China linked assets, what is changing? And on the investor side, you’ve just mentioned maybe not the general investors, in your opinion, but at least the specialist investors. the funds are deciding whether the China risk, China exposed assets, even if they’re high risk, whether that’s investable next five years, and what they’re under or overwriting in terms of the science, the execution, geopolitics, anything else. Leon: First of all, the big pharma, we call them strategic, including profitable mid to large cap pharma and biotech in the world. So for them, they typically have a capability to do multi-billion acquisition either as a company, which I saw this morning, Servier, the second largest pharma company from France, acquired the US based company, Day One. I put that into this category, where they are pretty adventurous, have been China for a long time, and fully embrace China from A to Z. They even talk to the universities. One of the big pharmas, their China trip organiser asked me to connect them to Westlake University [https://en.westlake.edu.cn], which is now one of the best universities in China. They wanted to talk to the professor. It was fascinating how deep they are in Chinese biotech universe – not even just Chinese biotech, but Chinese academia - they even know that Westlake is good at the biological basic research. Very surprising how the front-running pioneers, even big pharma, really know China. But of course in another category, they are a little bit more conservative, they are still worried. The most they want to do is just a license deal. So we see that wide spectrum: there are early movers, there are late adopters. For investors, it’s very similar. There are some investors, they were created 15, 20 years ago when there was a first wave in the belief that China biotech might be promising. The best example probably is Lilly Asia ventures, created with the big help of Eli Lilly. It was a semi-corporate venture to begin with, and later on became an independent private investment firm. They’re one of the most influential biotech investors in China. So this is a China dominant one. There are also some US ones. Probably the number one most active investor from the US is Orbimed [https://www.orbimed.com]. They never left China even when other healthcare tier one investment firms did, due to geopolitical, COVID, whatever reasons, the others left. But Orbimed never left, so now they have a huge advantage when China biotech is picking up. They got in a lot of good companies early on in. And of course, there are other tier one funds, who never thought China was important. So now they are playing catch up. And a lot of funds are actually opening their incubators in Shanghai or Suzhou. Some of them are shutting down their incubators in the Bay Area or in Boston. It’s happening because again, no brainer. If you are a capitalist, you just look at ROI. With $10 million in Kendall Square in Boston, you will not even have cell line development (for your biologics). But in China, with $10 million, you can probably already dose first patients in IIT trials. So as an investor, if I get some technology, say from Harvard, I can either do the &D development in Kendall Square, so the professor can visit, or I can do it in Shanghai or in Suzhou, where the professor can still visit virtually, via ZOOM call, not a big deal. This week, actually, we saw the reverse emerge, of Candid therapeutics with Rallybio. [https://investors.rallybio.com/news-releases/news-release-details/rallybio-corporation-and-candid-therapeutics-announce-merger]That’s how they’re to go public. The article that described this IPO through a reverse merger, it called Candid biotech a “San Diego- Shanghai biotech”. This definition is very interesting. So Candid is one of the superstar private companies, and they are falling into this big category called “buy and build” biotech. Many companies in this category in the US start with a pipeline, they license the pipeline from Big Pharma. But in Candid therapeutics, their four pipeline assets were licensed from China. Yet different from most other US biotech, they’re not a classic NewCo story (a newly formed company built around a licensed or spun-out asset). Most NewCo in the US, once they license the assets, they start developing in the US or in Europe. But Candid decided: no. Since China is so efficient with early stage clinical development, why not just develop those assets in China? So they built a team from scratch in Shanghai, and they have multiple trials running in China. The company went out of a stealth mode in late 2024. Now they are going to IPO. How fast is that? The valuation is crazy. They start with $370 million series A. And before they reverse merge IPO, they raised another more than $500 million. So they raised $900 million, almost $1 billion. Now you can do the math of what their valuation going to be. Very interesting. And if you look at their investors, these are all the best investors, most of the best investor from the US, from China, Europe. So it’s big party, the most popular party, all those investors want to pile in. 7. From the perspective of Chinese biotechs Ruby: So we’ve talked about the biotechs on the Western side and the investors, but then also thinking about the Chinese assets and the companies that are producing these. As they’re now becoming increasingly selective about who they partner with, what are you seeing from their point of view as they’re gaining experience, becoming choosy in who they think has a good reputation to let them land better outside of China? Leon: It’s about option. You can pick and choose. Right now, especially if you are Innovent, if you are Hengrui, or if you are CSPC, all those hot deals have multiple suiters, multiple bidders. Don’t think that the Chinese don’t know how to do deals anymore. They really know how to do deal, because their deal makers are trained in the US or in Europe, They know how the trade secrets of doing deals can be easily transferred just by building a team. Just get the talent to come over, and they’re going to streamline everything, and you can have globally competitive deals. A lot of investment bank and the top transaction lawyers are helping those China biotech biopharma as well. The talent is so fluid, in the end it is really about whether your asset is globally competitive, and can really fit the big pharma pipeline. China biopharma now have zero knowledge gap. But again, the caveats. People say that China right now has somewhere between 5,000 to 8,000 pharmaceutical focused companies, including big pharma and biotech. That’s a huge number. But if you look at the companies who really have done meaningful deals in the past three years, the numbers are less than 200. So the percentage of really good China pharmaceutical or biotech companies is really, really low. Let’s say you talk to 100 Chinese biotech companies, the majority of them will be not so good. If you are not very selective. Ruby: That’s a big difference proportionally. For a Chinese biotech company to choose to partner with the right Western multinational, is it that perhaps that multinational has already got expertise and market access in that particular type of pipeline? Or is it because they’ve got a longstanding relationship built on trust? Or is it that the size of the deal is the best? Or a combination of those and more. Hard to say? Leon: This combination - all of this and more. It’s really case by case. Not because the company just said, believe my asset is best, I can sell it. But if you plan really well, sometimes you can envision what the future is going to be. And then if all the stars line up, by the time you are ready to transact and your asset becomes really hot, then that’s where you can do pick and choose. Then the decision process criteria, who they’re going to work with, is really everything you mentioned and more. So it’s really hard to say, but the bottom line is the company who made the right decision two or three years ago to start a project. Right now, let’s say they get into phase one, you’re one of the hottest of the field. They’re have a really strong upper hand. There definitely is a seller’s market in that case. That’s where those big deals really come from. Ruby: And then in terms of your job, delivering these deals and making those connections, as we’re saying, there’s not only excitement and realisation, but also hype. Is your job becoming easier now that you’re doing less convincing and more practical doing? Or is it trying to sort through the greater amount of things on the table? Leon: I have two mandates. I have a buy side mandate, which is Western biotech companies and investment funds. I have a sell-side, when I represent my sell-side mandate, which typically is a China biotech company, phase one ready or phase one, phase two stage asset, we try to find a Western partner, outlicense our China rights. In that case, the good news is that I don’t need to tell them anymore that Chinese biotech research and assets are good. That conversation is now totally skipped, I don’t need to that anymore, they already are China believers. I barely talk to China skeptics. A typical BD conversation, you tell them why this is a good fit for your programme, why this is going to have tremendous value if we work together because we are small, or we cannot do early stage clinical development, we cannot do commercialisation, but you guys can do that. We create a value together, That’s the typical stuff. The difference between representing a US biotech or European biotech to out-license to big pharma, and doing this for China biotech, is really small now. So that’s the sales side. On the buy side, I represent the small guys, to buy Chinese assets. So actually our job becomes harder and harder, because the big guys, the strategists, are flooding China with their big cheques. We’re always joking that in the building process, any time big pharma joins, we leave. We get priced out. We get gentrified by the big pharma. They do the terms sheet of upfront pay much bigger than ours. So that’s always a little bit challenging. However, the market has also become stabilised. Big pharma have all the cheques, but their risk tolerance is much lower than us, than my clients. My client typically their job is taking risks. Our chequebook is smaller, but our stomach for risk is much bigger. So that’s where we play. I think that before, people in general labeled all the China biotechs as having less negotiation power, but now that label pretty much is gone. Again, a lot of China biotechs, if you legally look at them, they are not really Chinese companies at all. They’re either Cayman Island registered companies; some of them are just straightforward Delaware companies with operations in China; or the IP resides in the US or Europe from the beginning. So legally speaking, actually a lot of so-called China biotechs are European or US biotechs with R &D operations where the “R” is in China. Even if you really define big pharma based on where they do R &D, AstraZeneca has five R &D centres, one in Europe, two in US, and two in China. So how would you call AstraZeneca? Is this a Chinese company, an American company, or a British or Sweden company? What’s your definition? They’re listed (as a public company) both in London and also in New York. Ruby: As everyone is doing cross-border and having multiple locations around the world, it seems that strategically you call yourself whatever region is optimal for the situation you’re in. Whether that’s geopolitics, capital, whatever. Leon: R &D is intrinsically and by design global. And somehow the politicians, the government need to pigeonhole them into different country, which just does not reflect the nature of this business. Ruby: Yes, that’s such a great point. Health, biotech, innovation has always been global. Institutions and geopolitics, segments it all in challenging ways. 8. Europe vs US Ruby: Just picking up on European versus American investors, regional differences in appetite or perception. Can you share a bit more about that from what you’ve seen? Leon: I would say one or two years ago, there was a misconception, especially by some American investors, or even especially American politicians, who believe that the US is the dominant buyer of Chinese biotech asset innovation. They said, once we cut off the US-China license deal, China is about to die. Everyone in our industry was laughing so hard, because we know the numbers. Actually, in 2024, the Europeans spent more money than Americans in licensing Chinese assets. 2025, some people argued that because of the potential US ban of Chinese assets going to the US company. there’s a front load of Chinese assets in case this happened. And you remember last year, the draft executive order from Trump administration to ban Chinese license deals, someone saw that, and they front loaded. So last year, I think the US probably spent slightly more money on Chinese assets than Europe. The China biotechs, they have option, So a good example is the largest China outbound deal by value - it’s not with the American companies, it’s with AstraZeneca. AstraZeneca and CSPC signed the largest deal ever with China Biotech, $18.5 billion. And also remember, when did AstraZeneca sign the deal? when Minister Starmer visited China. So that was one of these diplomatic icings on the whole thing. So we cannot say to Chinese biotechs, we demand you do this. They would just say, if you’re really so demanding, I won’t do business with you, I will do business with Europeans. That’s why people realise banning the US-China dealmaking would be such a bad idea for the US biotech and biopharma and US investors. The net is a huge downside for the US industry. So we should just figure out a way how to live with China. Take something they’re very good at, take something we are really good at, and let’s just work together, create value together for patients around the world. I think that’s where the mentality should be. And you can also tell right now, instead of blaming China: “they steal, they cheat, they subsidise”, which is just a little bit true, most of it not true, right? Now there’s sharp contrast between how China does things and the US does things. The US gas realised our FDA is the problem. I mean, the Chinese have IIT, we have nothing like that in terms of equivalent pathways. For a US biotech company, if they are invested by some well-informed investor, they will tell them to do the first in human trial outside of the United States, and to recruit patients as much as possible outside of the United States until trials must be done in the United States to satisfy regulations. It used to be Australia as a preferred choice, but now China gradually become the preferred choice because of patient population, because of cost, because of everything. Ruby: From the China side, what do they see as an advantage of Europe versus America? Or are there not really, because as we just said, every company is actually global? Leon: So I think in the US, our position makes it very clear that biotech is a bargaining chip. So whenever President Trump and President Xi need to negotiate, this is on the table. It’s just the risk. Biotech needs certainty. And we are in such a high-risk industry. Any regulatory geopolitical uncertainty can destroy a company, period, and that’s exactly what happened, domestically in the US. That’s why a lot of investors say they will never stop investing in cell and gene therapy in the US, just because of FDA, unless they’re weak. So the same thing for some, not all China biotech biopharma. If they want to have five year, ten year collaborations with a partner, they want to make sure the partner is going to be located in a stable environment. In that case, Europe probably has more attractive potential than the US. There are a few straightforward European acquisitions of Chinese located or based biotech company in the past couple of years: Gracell was acquired by AstraZeneca, [https://www.astrazeneca.com/media-centre/press-releases/2023/astrazeneca-to-acquire-gracell-furthering-cell-therapy-ambition-across-oncology-and-autoimmune-diseases.html#modal-historic-confirmation] ProfoundBio by Genmab, [https://ir.genmab.com/news-releases/news-release-details/genmab-completes-acquisition-profoundbio] Biotheus by BioNTech [https://investors.biontech.de/news-releases/news-release-details/biontech-completes-acquisition-biotheus], and another was SanReno, acquired by Novartis. [https://www.prnewswire.com/news-releases/sanreno-therapeutics-announces-acquisition-by-novartis-in-pivotal-transaction-to-bring-forward-transformative-therapeutics-in-kidney-disease-302026982.html] All those buyers came from Europe. That could be just an accident… you can form your own opinion! 9. Execution Ruby: And then moving on to the execution, after the deal and the partnership gets going, what signals can we use to predict the potential of realisation or the risks of these cross border partnerships, for Chinese biotech with enough capital, enough expertise, if they decide to utilise their own manufacturing and supply chains on the ground in the US market, rather than partner with a Western MNC to access patients and providers? Obviously, maybe it’s early on for some of the deals we’re seeing now, but the ones that have been going for a couple of years now. What are you seeing being indicators of them being successful or less so, Leon: If you really want to become commercial stage company for the Western market, even if the innovation originates from China, you have to manufacture their stuff preferably in the US or Europe or in allied friendly countries. So that’s one of biggest barriers for the China biopharma biotech to climb the value chain, and to become a late stage or commercial stage for the Western market. BeOne is now a Swiss company, it’s not a China company legally. So they totally uprooted themselves and put themselves in the Western ecosystem. So I don’t treat B1 as a China biotech at all, but a European or global, mid-sized biotech. so all the baggage other China biopharma have, they don’t. But for the others, like Hengrui, they do have the challenge. Their manufacturing, their R&D efficiency, cost advantages and so on, only exist if they do that in China. If they leave China, they leave their core competitive advantage, that’s why they have to partner with the Western biopharma. So that’s why I don’t worry much about the late stage biotech or strategic big pharma, big biotech from the West. They will not have much pressure from the rise of China biotech, because actually, especially between US and China, the geopolitical issues create a pretty insurmountable barrier for China biotech to really climb the value chain. To use the jargon of NPV (net present value), the majority is going to stay with the US biopharma, with large biotech, just because they control their manufacturing, they control their commercialisation and late stage clinical development capability. 10. Looking ahead Ruby: And finally, the forward view. We’re in March now and we’re looking ahead at the rest of 2026 and beyond. From today’s vantage point, what are you watching for, in terms of the momentum going forward? Leon: The biggest one is really still the regulation and geopolitical risk factors. We are a global business, and anything that disrupts the global collaboration and money or capital flow or change of knowledge is going to be pretty substantial for our industry. So that’s definitely number one risk for China-to-West collaboration. But of course, people get into biotech because there’s a lot of upsides in helping patients around the world. I would still closely watch the deal flows, either licensing deal or R&D collaborations like what Eli Lilly did with the Innovent. If those kinds of deal flows continue without any sign of slowing down, the truth is that the American corporate executives are so well informed, and they have a direct line to the White House, to all those Congress, policymakers, lawmakers, and they make informed risk taking. If that continues, probably their evaluation of risk exists - but it’s not that big, which is good. I will also look at the exchange of talents from the West and China. whether they continue, whether collaborations also continue. If that’s the case, I think that misconceptions and misunderstandings will be less likely to happen, or less likely to mature to such a stage that some dramatic detrimental decision would be made from either side of government or policymakers. So those are three things that I’m most curious about. Get full access to China Health Pulse at www.chinahealthpulse.com/subscribe [https://www.chinahealthpulse.com/subscribe?utm_medium=podcast&utm_campaign=CTA_4]

Starmer in Beijing: Health, Science and Europe-China Relations - with Professor Kerry Brown

This week, UK–China relations are back in the spotlight. Keir Starmer is the first British Prime Minister to visit China in 8 years, and his trip is renewing attention on how the UK defines engagement, risk, and cooperation with a country that is now a global producer of frontier technology and innovation, including medical science, pharmaceutical innovation and artificial intelligence. Today’s timely episode looks at the longer relationship between Europe and China that sits underneath moments like this, to understand what responsible engagement can and should look like today and in the future, focusing, of course on health. My guest today is Professor Kerry Brown [https://www.kerry-brown.co.uk], an academic, sinologist/historian, former diplomat and prolific author who has spent decades interpreting China for Western audiences. He has written over 20 books on modern Chinese politics (see end of post for list), as well as written for every major international news outlet, and been interviewed by every major news channel. As one of the key voices on China in the West, he is adept at articulating the necessary yet sometimes uncomfortable truths about how such a complex nation can be understood by the rest of the world. Kerry is the Director of the Lau China Institute [https://www.kcl.ac.uk/people/kerry-brown] at King’s College London, where he is also Professor of Chinese Studies, Associate of the Asia Pacific Programme at Chatham House, Adjunct at the Australia New Zealand School of Government in Melbourne, and Co-Editor of the Journal of Current Chinese Affairs. He was previously Professor of Chinese Politics and Director of the China Studies Centre at the University of Sydney, Australia, and directed the Europe China Research and Advice Network. Before that, he worked at the British Foreign and Commonwealth Office for almost a decade, as First Secretary at the British Embassy in Beijing, and then as Head of the Indonesia, Philippine and East Timor Section. He holds a Master of Arts from Gonville and Caius College at Cambridge University and a PhD in Chinese politics and language from Leeds University. Our conversation connects historical context with present-day relevance to explore why medicine, health and science have become some of the most consequential - and least understood - contact zones between the UK and Europe, with China, and how academic institutions are crucial influences on medical knowledge and healthcare delivery for patients everywhere. Listen on Spotify [https://open.spotify.com/show/4LLRGIauUUG3A5I2YbduMb?si=58dcc45ba3214793] & Apple Podcasts [https://podcasts.apple.com/us/podcast/the-chp-podcast/id1844027762], or watch on Youtube [https://www.youtube.com/@ChinaHealthPulse] and substack [http://chinahealthpulse.com]. Substack's newsletter posts provide all links, plus a full text transcript of each episode. Get full access to China Health Pulse at www.chinahealthpulse.com/subscribe [https://www.chinahealthpulse.com/subscribe?utm_medium=podcast&utm_campaign=CTA_4]

Scaling a Leading Global Biotech from China - with Josh Smiley, President and COO of Zai Lab

🎧 [https://emojipedia.org/headphone] Here on https://chinahealthpulse.substack.com/s/podcastThe ChinaHealthPulse Podcast [https://chinahealthpulse.substack.com/s/podcast], I chat in depth with the true experts who have dedicated years to working in and with China’s health - across policy, industry, academia and well beyond. Our candid conversations aim to provide you with real insight into how care is delivered, how decisions are made, and why it all matters, far beyond China’s borders. Watch or listen on the CHP substack newsletter [https://www.chinahealthpulse.com/s/podcast], which provides all links, plus a full text transcript of each episode, and/or subscribe on Spotify [https://open.spotify.com/show/4LLRGIauUUG3A5I2YbduMb?si=58dcc45ba3214793] & Apple Podcasts [https://podcasts.apple.com/us/podcast/the-chp-podcast/id1844027762]. Happy 2026! To welcome in the new year, the CHP Podcast is delighted to be joined by Josh Smiley, President and Chief Operating Officer at Zai Lab 再鼎医药 [https://www.zailaboratory.com] - one of China’s most globally recognised innovative biotechs. As a seasoned senior executive in the global biopharma landscape, Josh sits directly within the intersection of science, regulation and capital markets - he brings a rare insider’s view into China’s biotech rise. Zai Lab was founded in Shanghai in 2014 and now operates across China and the US (HKEX & NASDAQ dual-listed). It is well known for bringing cutting-edge medicines into China, particularly in areas like immunology, oncology and more recently, neuroscience, while increasingly advancing its own pipeline toward international markets. Since joining Zai Lab in 2022 as President and COO, Josh oversees all aspects of the company’s commercial operations, manufacturing, business development, finance, human resources, information technology, corporate affairs and overall strategy. Prior to Zai Lab, he served as Chief Financial Officer for Eli Lilly, one of the world's largest biopharma multi-national companies. He spent more than 25 years at Lilly, in positions of increasing responsibility, including as senior vice president of finance, corporate controller and treasurer, and in leading US sales and marketing, business development, and mergers and acquisitions. Earlier in his career, he worked in investment banking and consulting, and he holds a BA in History from Harvard University. In our conversation, Josh speaks candidly about the realities of operating inside China’s biotech ecosystem, where ambition meets constraint, and how global innovation is scaled and adapted across borders. It is a wide-ranging and substantive discussion that offers genuinely distinctive insights from someone who is shaping the sector from the inside. Get full access to China Health Pulse at www.chinahealthpulse.com/subscribe [https://www.chinahealthpulse.com/subscribe?utm_medium=podcast&utm_campaign=CTA_4]

Reflecting on World AIDS Day - with Leading China HIV Expert, Professor Joan Kaufman

🎧 [https://emojipedia.org/headphone]This is a special collaboration between Ruby Wang [https://substack.com/profile/2545218-ruby-wang] at ChinaHealthPulse [https://chinahealthpulse.substack.com/s/podcast] and 何流｜Liu He [https://substack.com/profile/100827311-liu-he] at Peking Hotel [null], to mark World AIDS Day, on 1st December 2025. Today, we are thrilled to welcome Professor Joan Kaufman, one of the world’s leading experts on HIV and China. Joan has spent her career at the intersection of public health, policy and social justice, working across the United Nations, philanthropy and academia. Her work has profoundly shaped how the world understands health, rights, and China’s role in both. Joan first moved to China in 1980, working with the United Nations in Beijing during a pivotal moment when China’s health system was just beginning to reopen to the world. In the 1990s in the Ford Foundation’s Beijing office, she pioneered work on women’s rights, reproductive health and HIV prevention. From 2002 to 2012, she led China programmes for the International AIDS Vaccine Initiative, building bridges between Chinese scientists and global vaccine efforts. In academia, Joan has held senior roles at Harvard, Columbia, Brandeis and Tsinghua University. She founded Harvard’s AIDS Public Policy Project, directed Columbia’s Global Center in Beijing, and taught global health and social medicine at Harvard for may years. Today, she serves as Senior Director for Academic Programmes at Schwarzman Scholars, where she mentors emerging global leaders to think critically about China, global health and the world. In today’s special episode, Joan joins us to reflect on the arc of China’s HIV response over the decades, and her life’s work at its heart. Get full access to China Health Pulse at www.chinahealthpulse.com/subscribe [https://www.chinahealthpulse.com/subscribe?utm_medium=podcast&utm_campaign=CTA_4]