1. De Horizon
Consulting Intl.
NEWSLETTER
ISSUE NOV 2013
Fri, Nov 8, 2013
De Horizon is pleased to present you
with our second Newsletter!
KEY
FACTS
De Horizon Consulting Intl.
- Active since 2010,
headquartered in Beijing, with
a nationwide project coverage
by our teams in Shanghai,
Chengdu, and Hong Kong
- Over 100 successful cases with
clients from Europe and the
US until 2012
- Industry experts, incl. market
research, partner
investigations, networking,
licensing, marketing or legal
assistance, and more
As an established consulting firm, De Horizon will be continuously
publishing regular Newsletters to keep you informed about the
latest developments, trends and opportunities in Healthcare,
Biotechnology, Pharmaceutical and Medical Devices sectors in
China, as well as our company activities and events.
This month’ issue connects with Biotechnology, Pharmaceutical and
Medical Devices industries and brings you the Chinese market
inside view.
We hope this Newsletter will give you a decent understanding of
China Biotech Industry; and please don't hesitate to ask us any
questions you may have, we will gather all your concerns to be part
of our upcoming Newsletters or Workshops.
De Horizon Consulting Intl. Newsletter | Issue Nov 2013
1

2. Chinese Government
focuses on Biotechnology
At the beginning of 2013, the State Council
of the People's Republic of China issued a "BioIndustry Development Plan" to highlight the
specific role of Biotechnology industrial
development as outlined in China’s “12th Five-Year
Plan” (FYP).(1) China’s 12th FYP was promulgated in
2012 and has determined Biotechnology as one of
seven most important industries for China’s overall
market development, focusing on Biological
Products,
Biopharmaceuticals,
Biomedical
Engineering,
Bio-Agriculture
and
BioManufacturing.
Practically,
the
Chinese
government has allocated more than 12 billion
RMB for the development of new drugs between
2011 and 2015, of which Biotech companies have
already received benefits in a complex mix of
government investments, preferential tax and
fiscal policies. In addition, targeting qualitative
improvements of Biotechnology products in China,
the government explicitly promoted foreign
investments and innovation by referring to both
3,0
academic and industrial R&D collaborations.
China’s Biotech Industry
2,5
GDP prognosis
1,8
1,5
1,0
2,4
(in trillion RMB)
2,0
1,5
0,66
0,86
1
1,2
0,5
0,0
2007
2008
Source: www.sts.org.cn
2009
2010
2011
2012
2015
CHINA BIOTECH INSIGHT
Despite all these efforts, China still remains as a
technology manufacturer, unlike companies from
Europe or the US, which could be widely
compared as innovative and, thus, will easily find
their place in the Chinese Health Care market.
Bio-Industry Development Plan - main concepts
• Develop Bio-pharma product quality and
competitiveness
• Develop Biomedical high-end engineering
• Accelerate Biological agriculture development
• Promote of industrial scale Bio-manufacturing
• Commercial development of the Bioenergy inustry
• Develop Bio-environmental industry
• Adjust Bio-industry development to market needs
Biotechnology as a pillar industry
While FYPs give general directions of
national development, China’s new “Bio-Industry
Development Plan” was published to specifically
promote Biotechnology. It includes an industry
development path for the nearest future and
emphasizes Biotechnology as a pillar industry(2),
next to the sectors of Automotive, Construction,
Mechanicals, Electronics, and Petrochemical by
2020. The plan pointed out that the Bio-industry
had an average annual growth rate of 22.9% in
2011 and about 2 trillion RMB in output value.
(1) China’s Five-Year Plans constitute both social and economic development directions, while most recently they have focused on rebalancing China's economy through
actively shifting from investment towards consumption and supporting rural development instead of urban or coastal areas.
(2) A "pillar" industry in China refers to an industry that is large enough capacity, and thus can provide a country's economic growth momentum and is large enough scale
in order to be able to absorb a country's potential labor force.
De Horizon Consulting Intl. Newsletter | Issue Nov 2013
2

3. Related numbers also give a
promising outlook for regional
development - the value
added of Bio-industry will
reach high figures even in
central China, for example 100
billion RMB in Shaanxi
province by the end of 2015.
During the years 2013-2015,
the average annual growth of
China's Bio-industry output
should remain at a unique rate
of 20%. Taking this growth as
granted, the plan assumes
that in 2015, China's Bioindustry GDP rate should be at
least doubled as high as the
one of 2010.
GMP
Another effort for
developing the Bio-industry
was made in February 2013,
when SFDA (China's Food and
Drug Administration) issued
revised
GMP
(Good
Manufacturing Practices),
Foreign SME's in China outlook for their business until 2017
83%
Optimistic
76%
74%
Neutral
Pessimistic
18%
13%
4%
Pharma &
Healthcare
6%
Chemicals
&
Petroleum
26%
0%
Food &
Beverage
Source: EUCC Business Confidence Survey 2013
diminishing
some
inconsistencies in the existing
bio-business relevant laws like
the
"Pharmaceutical
Administration
Law"
or
"Regulations
for
Implementation of the Drug
Administration Law", to be
more consistent with other
new policies regarding bioindustry such as the 12th FYP.
Optimistic prognosis
According to a Business
Confidence Survey presented
by the EUCC (European Union
Chamber of Commerce in
China) more than 65% of
European
Pharma
&
Healthcare
companies
admitted that they missed out
business opportunities due to
"The trend is your friend"
market access or regulatory
barriers in China. Despite that
fact, more than a quarter of
companies stated they were
generating 25% or more of
their global revenues in China
in 2013, compared to 17% in
2009. Over a third of them
were SMEs
(Small and
Medium Enterprises). Along
with data evaluated by the
American
Chamber
of
Commerce in Shanghai in a
China
Business
Report
(2012/13), which indicated
that 45% of the American
companies generated more
Human
Health Care
Bioindustry
services
Environment
Bio
Industry
China
Agriculture,
Animal
Health and
Food
Materials &
Energy
Bio
Resources &
Ocean
Biotech
than 11% of their global
revenue in China, a general 5year outlook of companies in
China could be summarized as
very optimistic. Therefore,
along with its interest in
foreign technologies, the
Chinese government will
expectedly
increasingly
backup foreign companies both
on
financial
and
legislative levels.
Along not against
What's important is
the need for companies doing
business in China to adjust
their China business plans to
FYP and other additional
policies. If you have a
thorough
knowledge
of
China's policies and adjust
your
business
plan
accordingly, you are more
likely to succeed. As Dan
Harris writes about 12th FYP
on www.chinalawblog.com "The trend is your friend"(3) you just need to have the right
tools to handle it.
Contact us if you need any
assistance.
(3) www.chinalawblog.com/2013/03/chinas-12th-five-year-plan-go-with-it-not-against-it.html
De Horizon Consulting Intl. Newsletter | Issue Nov 2013
3

4. Understanding China Medical Devices Market
It will be redundant to mention how fast China’s Medical
Device market is growing, as it’s an obvious fact and statistics are
not hard to access. However, huge market potential does not lead
straightly to success. Do you know where the opportunities are,
how to penetrate this market and how to overcome its market
complexity or operational challenges?
Click here to read more
Shift on China's Pharmaceutical Market
According to analysis issued by the State Food and Drug
Administration (SFDA) on Oct 28th, only 29.7% of Chinese
enterprises producing aseptic pharmaceutical have passed latest
SFDA revised sterile pharmaceutical GMP (Good Manufacture
Practice) certification, issued August 2013. The SFDA predicts that
although this number will rise to 40% by the end of the year, all
other domestic enterprises will have to face quitting the business.
Click here to read more
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We are a consulting company
headquartered
in
Beijing,
providing China entry solutions
for clients operating in multiple
industrial sectors including
health care, green technology,
and general aviation. Our range
of services include consulting
and
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services,
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and facilitation services, legal
services, and more.
Don’t hesitate to contact us for
or if you have any feedback,
suggestions or tips. We look
forward to hear from you!
De Horizon Consulting Intl. Newsletter | Issue Nov 2013
4