Did you know?

ChinaBio® Group is a consulting and advisory firm helping life science companies and investors achieve success in China. ChinaBio works with U.S., European and APAC companies and investors seeking partnerships, acquisitions, novel technologies and funding in China.  

Learn more >>

Free Newsletter

Have the latest stories on China's life science industry delivered to your inbox daily or weekly - free!

  Email address:

China’s Opportunity to Create Mega-Clusters

publication date: Nov 17, 2009
author/source: Greg B. Scott, Executive Editor
The Beijing government recently asked me to give a talk on the “Silicon Valley Model” at the Beijing International Healthcare Industry Forum. I gladly accepted the invitation, but then questioned my qualifications, especially when it took me three days to research and write the speech! (Click here to see my slides.)

What I realized during my research is that there is a huge difference between China and the US when it comes to building “life science clusters.” The US has no strategic plan about how to create a cluster, and so the clusters grow up organically over many, many years. That probably explains why we have only three or four real clusters focused on life sciences – San Francisco/Silicon Valley, Boston/New England, San Diego/Southern California, and you might also count Research Triangle in North Carolina. A number of other areas claim to be clusters, but they are really more just concentrations of companies and/or researchers. A true cluster requires a critical mass of companies and a diversity of support services (VC, legal, accounting etc.) dedicated to early stage life science companies.

China, on the other hand, “declares” that an area will become a cluster, and then makes it so. They have taken very large areas – often 10-15 square miles or more, such as in Zhangjiang Hi-Tech Park in Shanghai, or China Medical City in Taizhou – and moved the residents and farmers out to create dedicated life science parks. They’ve moved universities and institutes into the area either with incentives (Suzhou’s BioBay) or by declaration (Kunming, which is moving 12 universities and institutes into one area, or Beijing, which established its prestigious National Institute of Biological Sciences in Zhongguancun). This obviously takes huge capital investment, but China is happy to make these investments in its quest to become an innovation-based economy.

Moving life science companies and research institutes together is a good start, but China also provides significant financial incentives to attract companies and stimulate growth. Zhangjiang, Taizhou, Suzhou, Tianjin, and others have provided free land, free buildings, cash, free rent, tax relief, etc.

The gap between Silicon Valley and China lies in private funding. It’s great that there is a lot of government money to go around, but at some point private funding must come in and take the companies to the next stage. While this has often happened in China in high tech (IT, chips, communications, etc.), life sciences seems to be left behind. Even in 2007, China’s biggest VC year to date, only about 6% or $400 million US of total VC went into the industry. This can barely build a handful of companies, let along an entire industry. The good news is that we’re seeing a comeback in VC investment in Q3 2009, though only time will tell if this will reach the required level of investment.

Nevertheless, don’t count China out. Here are some critical stats that indicate China is hot on the US’s heels:

• 7,500 life science companies
• 500 universities and institutes focused on life science
• 2,500 top researchers
• 50 life science parks
• 200 life science incubators
• 2,000 novel drugs patented
• 69,000 returnees (up 57%)
• 16,000 PhD graduates, 85,000 BS, 60,000 MS (2007)

More importantly, what I saw, as I mapped the areas of greatest life science innovation in China, was the organic growth of four mega clusters:

• Capital Mega Cluster – Beijing, Tianjin, Liaoning, Hebei, Shandong
• East Mega Cluster – Shanghai, Suzhou, Taizhou, Hangzhou, Nanjing
• Central Mega Cluster – Chongqing, Chengdu, Xi’an, Wuhan
• Southern Mega Cluster – Guangzhou, Shenzhen, Hong Kong

We have visited nearly all of the above cities and life science parks, and can tell you with certainty that the momentum is huge. The central and local governments are investing huge sums to make their area the leader in life science, creating vibrant, but mostly nascent, life science communities. What remains to be seen is, can China generate enough private funding to take these new-born or adolescent parks to maturity, and can they take what are now very fragmented and competitive life science parks, and create much more focused, collaborative mega clusters that will enable China to become the #1 country for true life science innovation.

As I told the audience of life science executives and government officials in Beijing:
(Zhong guo de wei lai zai nimen shou zhong)

China’s future is in your hands!


Share this with colleagues:


ChinaBio® News

Greg Scott BIO-Europe Interview
Greg Scott Interviewed at BIO-Europe Spring

How to bring your China assets to China in 8 minutes

Greg Scott Mendelspod Interview
"Mr. Bio in China."
Mendelspod Interview

Multinational pharma held to a higher standard in China

Partner Event
November 2-3, 2023 | Shanghai
November 7-8, 2023 | Digital