R&D Activities of Chemical and Pharmaceutical Companies in China

Core Messages

• Many of the major international pharma and espcially chemical companies have own R&D facilities in China.
• The main driving forces behind establishing own R&D facilities in China are lower costs, high quality of work, high level of competence and a high number of well educated chemists coming from the universities.
• Co-operations with international companies are becoming more important for Chinese universities and they and research institutes offer attractive co-operation possibilities for foreign companies.
• R&D in China is about 60% cheaper than in Western Europe (labour costs are about 70%, labour related costs about 60% and infrastructure about 40% lower).
• The number of chemists coming from Chinese universities is higher than those coming from Western European universities and an increasing number of very motivated young scientists with education abroad are brought back by national start-up programmes for young professors to start their career at universities in China.
• The major risk is based on the high fluctuation rate which can lead to know-how loss and the spreading of know-how. Due to the importance of the market, it is expected that ...

- in the next few years chemical and pharma companies will be increasing their R&D activities in China,  

- support of market development and not cost savings is the major motivation to go to China with R&D,  

- besides new R&D activities, relocation of R&D activities from Western Europe and the US to China will take place,

- the current situation with production in China and R&D abroad will no longer exist in the long-term, 

- early engagement is necessary, in order to gain experience and to stake “claims”.