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HKEX Biotech Summit: Hong Kong Is a Bridge Between East and West for Global Biotech
One year ago, the Hong Kong Exchange started its pre-revenue track for China biopharma IPOs. In its first twelve months of activity, the exchange hosted IPOs for ten biopharmas, including seven pre-revenue firms, and raised over US$4.2 billion. That made the HKEX the world's second largest exchange for biopharma IPOs. Charles Li, Chief Executive of the Exchange, told the more than 1,000 attendees at the Second HKEX Biotech Summit, held last week, that ten more biopharmas have already filed for future IPOs with a "very strong" pipeline following them. However, as Mr. Li noted in his Keynote Address, the future for Hong Kong and biotech has more than its usual share of uncertainty (see story).
According to Mr. Li, the first months of 2019 were calm. Unfortunately, the calm has been replaced with increased uncertainty, caused by the trade disputes between China and the US. "We are seeing increased risk of a global decoupling, a world polarizing between the East and West, as well as creeping nationalism," he said.
The "divorce" between the two countries could have a negative effect on global capital investments, he added, which would harm global biopharma development, an industry that is built upon global commonalties.
According to Mr. Li:
• Biotech should be without borders;
• Investments in biotech help Humanity as a whole and should be without undue restrictions;
• Hong Kong has a unique role to play in the future development of the industry.
If there is to be a trade-induced divorce between China and the US, Hong Kong's longstanding position as a bridge between east and west would decline in importance as contacts between west and east diminish.
Since the 1997 takeover of Hong Kong, China has developed the One Country, Two Systems strategy for ruling Hong Kong. "One Country means Hong Kong is part of China; Two Systems means that Hong Kong grew up in a Western family with different values rooted in the rule of law, a free capital market economy and an open society; those values remain and I don’t expect it will change anytime soon," Mr. Li said.
To maintain its One Country, Two Systems, Hong Kong must have China's trust, but Hong Kong's value to China is based on western trust in Hong Kong, he added. Finding the balance between One Country and Two Systems is not easy, but nonetheless necessary.
Essentially, Hong Kong serves as a bridge between east and west, in Mr. Li's words. The current situation, one in which ties between the two are not strong, is not sustainable over the longer term. Better bridges are needed, bridges that allow people, goods and capital to move freely. For Mr. Li, "Hong Kong is a perfect bridge and I am certain it will continue to play that pivotal role in the years ahead. Today, we are here because the biotech industry is a bridge builder:
• Between the US and Chinese biotech communities;
• Between global capital and global biotech;
• Between Chinese capital and US and global capital."
"Most important of all, [the bridge] must allow the US and China, the two global superpowers, to maintain their strong and inseparable ties whether or not their matrimony continues. America deserves that, China deserves that and the world deserves that. Hong Kong is a perfect bridge and I am certain it will continue to play that pivotal role in the years ahead," he declared.
Editor's Note: BayHelix, the San Francisco Bay area organization of life science executives with China heritage, was one of the supporting organizations of the Second HKEX Biotech Summit.