Group 1: Economic Growth Factors - Asia's economic growth in 2017 exceeded expectations due to simultaneous increases in domestic demand and exports[12] - Major economies like China and India have successfully addressed significant issues, enhancing their growth prospects[13] - Infrastructure spending remains crucial for short-term economic activity and long-term productivity growth in the region[14] Group 2: Domestic Conditions - Many Asian economies are experiencing a rebound in domestic demand, particularly in India, the Philippines, and Thailand[14] - Internal trade is a primary driver of export growth, with over 50% of exports from Asian countries sold within the region[14] - Inflation stability allows for continued monetary policy support for economic recovery[14] Group 3: Infrastructure Initiatives - The "Belt and Road" initiative is a significant infrastructure project aimed at enhancing trade links between Asia and Europe, with an investment total of $900 billion[79] - Governments across Asia are committing substantial funds to infrastructure projects, particularly in transportation[27] - India's government has launched a ₹7 trillion infrastructure project aimed at constructing over 80,000 kilometers of roads by March 2022[27] Group 4: Global Demand Recovery - Global economic growth is projected to rise from 3.2% in 2016 to 3.6% in 2017 and 3.7% in 2018, benefiting Asia's trade-driven economies[34] - Over 75% of the global economy is currently in recovery, supporting increased economic activity in the Asia-Pacific region[34] - The World Trade Organization reports a 5.1% increase in global trade volume in September 2017, indicating a robust recovery in exports[51]

Research Framework - The survey was conducted from January 2025 to February 7, 2025, involving 125 operators and investors in the Chinese Life Sciences and Healthcare (LSHC) industry [4] Industry Outlook and Considerations - The Chinese life sciences and healthcare industry is expected to see improved performance in 2024 compared to 2023, although still below market expectations. Local companies are facing increased commercialization pressures [13][22] - 54% of respondents believe their business performance in China will exceed that of 2023, with 60% achieving or exceeding their plans [14][22] - Key factors influencing business performance include pricing policies, new product launches, and increased investment in business development [16][18] Insights Summary - There is a growing optimism among companies regarding their business prospects in China for 2025, with 42% expecting revenue growth above 10% [23][22] - The importance of market size remains a primary consideration for companies entering the Chinese market, with a focus on patient demand and government pricing negotiations [52][54] - Companies are increasingly prioritizing local R&D investments and clinical trials, particularly in response to relaxed foreign investment restrictions [50][49] Regulatory and Technological Impacts - The regulatory framework in China is evolving, with nearly half of respondents indicating a tightening of regulations in 2024, particularly affecting local companies [35][36] - Data privacy and export restrictions are becoming more significant, prompting companies to develop localized solutions [36][39] Changes in Commercial Investment Strategies - There is a notable shift towards cautious investment strategies, with 94% of respondents indicating a need to invest, but over half are more reserved about increasing investments [54][55] - The focus on new market channels is critical, with 76% of respondents deploying new channel investments, although reliance on partnerships has decreased [47][48] Strategic Initiatives - Companies are adjusting their product portfolios to address pricing pressures and regulatory changes, with 50% of respondents indicating this as a strategic focus [29][52] - The emphasis on digital capabilities and local solutions is increasing, with 44% of respondents prioritizing digital talent strategies [40][41]

Group 1: Decarbonization Goals - Achieving net-zero greenhouse gas emissions by 2050 requires a fundamental shift from fossil fuel-based systems to highly renewable and electrified energy systems[6] - Aviation and shipping industries are responsible for approximately 1 billion tons of CO2 emissions annually, accounting for about 6% of global emissions[15] - By 2050, aviation CO2 emissions are expected to decrease by approximately 75%, while shipping emissions could reach near-zero levels, with a reduction of 95%[7] Group 2: Role of Low-Carbon Fuels - Sustainable aviation fuel (SAF) and synthetic fuels are projected to be the primary low-carbon fuel sources for aviation and shipping by 2050, with synthetic fuels expected to account for about 40% of aviation fuel supply[6][28] - To achieve the required levels of synthetic fuel supply by 2050, approximately 150 million tons of sustainable hydrogen and 700 million tons of climate-neutral CO2 will be needed[7] - The production of clean hydrogen, fuel synthesis, and direct air capture will require up to 10,000 TWh of clean electricity by 2050, equivalent to one-third of global electricity generation in 2023[8] Group 3: Economic and Technical Challenges - The cost of synthetic fuels is currently significantly higher than fossil fuels, with prices potentially remaining two to ten times higher without public support[9] - An estimated annual investment of about $130 billion will be necessary by 2050 to ensure sufficient supply of synthetic fuels, which is comparable to the total fuel expenditure of the aviation and shipping sectors[9] - The transition to low-carbon fuels involves overcoming major technical challenges, including the need for new fuel supply infrastructure and engine solutions for shipping[10] Group 4: Future Outlook and Collaboration - Policymakers play a crucial role in creating the initial conditions for the transition, including establishing regulatory frameworks and providing ongoing support[13] - International organizations can facilitate a coordinated global energy transition by implementing universal rules and certification systems for low-carbon fuels[13] - Collaboration among all stakeholders in the value chain is essential for achieving the decarbonization goals in aviation and shipping[11]

Investment Rating - The report does not explicitly state an investment rating for the LSHC industry in China for 2025. Core Insights - The overall sentiment towards the Chinese LSHC industry is optimistic, with local players showing the most ambition and confidence for growth in 2025 [24][25]. - The industry is experiencing increased competition and a shift towards cautious investment strategies due to changing market dynamics and regulatory environments [27][30]. Summary by Sections Industry Outlook and Considerations - The Chinese LSHC industry is expected to see a growth rate exceeding 10% in total revenue plans for 2025, with a significant portion of local players expressing optimism [25]. - 54% of respondents believe their business performance in 2024 will exceed that of 2023, indicating a cautious yet positive outlook [18]. - The local and foreign players are increasingly focusing on business development efforts, with a notable emphasis on "going out" strategies and seeking overseas partnerships [20]. Regulatory and Technological Impacts - The regulatory framework in China is evolving, with nearly half of the respondents indicating that it has become more restrictive, particularly concerning data privacy and export regulations [35][39]. - The importance of innovation and market access remains high, with 56% of respondents emphasizing the need for new drug registrations and market entry as critical factors for success [44]. - Digital talent strategies are becoming a priority, with 44% of companies recognizing the need to adapt their talent models to enhance digital competitiveness [42]. New Business Investment Strategies - There is a notable shift towards localizing investments, with 66% of respondents indicating increased investment in local R&D and clinical trials following the relaxation of foreign investment restrictions [51]. - The focus on new market channels beyond traditional hospital routes is growing, with 76% of respondents deploying investments in these new channels [48]. - Companies are increasingly cautious in their investment approaches, with a decline in overall investment willingness from 42% to 36%, reflecting a more conservative attitude towards new opportunities [56].

Investment Rating - The report does not explicitly provide an investment rating for the biopharmaceutical industry Core Insights - The Chinese biopharmaceutical industry has experienced rapid growth over the past decade but has faced significant pressure in recent years due to economic slowdowns and market challenges. However, a recovery is anticipated in 2024, supported by new government policies aimed at fostering innovation across the entire value chain [6][9][18] - The government's "full-chain support for innovation" policy is expected to provide comprehensive support for the biopharmaceutical industry, enhancing confidence among companies and promoting transformation and development [6][34][68] Summary by Sections 1. Industry Overview - The biopharmaceutical industry in China has been a core focus of national industrial strategy, with significant growth until 2021, followed by a downturn starting in 2022. Recent data indicates a recovery trend in 2024 [9][10][18] - The financing landscape for the life sciences and health care sector has seen a sharp decline in both the number of financing projects and the scale of financing since 2022, continuing into 2024 [13][14][18] - External uncertainties, such as global economic slowdowns and unfavorable legislative proposals, have impacted investment confidence in the biopharmaceutical sector, although signs of economic recovery are emerging [18][19] 2. Government Policies - The central government has introduced a new strategic framework for "full-chain support for innovative drug development," which includes funding support, talent cultivation, and streamlined approval processes [36][40] - Local governments have implemented specific policies to support the central government's strategy, including financial incentives and operational support for biopharmaceutical companies [38][41] 3. Company Strategies - Both multinational and local biopharmaceutical companies are actively seeking to leverage the new government policies to navigate the current market challenges and enhance their competitive positions [49][50] - Multinational companies are focusing on introducing innovative products to the Chinese market and strengthening collaborations with local firms to optimize their R&D pipelines [50][55] - Local companies are expanding their R&D activities across different regions to maximize the benefits from local policies and resources [56][60] 4. Key Considerations for Companies - Companies must consider tax and regulatory factors when formulating their strategies in China, including the implications of local policies on R&D and market entry [64][66] - The report emphasizes the importance of strategic planning to optimize tax efficiency and compliance with regulatory requirements [66][68] 5. Conclusion - Despite facing pressures, the Chinese biopharmaceutical industry is expected to continue its growth trajectory, driven by government support and the increasing innovation capabilities of local companies [67][68]

Investment Rating - The report does not explicitly provide an investment rating for the LSHC industry in China for 2025. Core Insights - The overall sentiment towards the Chinese LSHC industry is optimistic, with local players exhibiting the most ambition and positivity regarding future growth [22][24]. - The industry is experiencing increased internal competition, leading to a more cautious investment approach as alternative markets become more attractive [25][27]. - Regulatory frameworks are evolving, with a significant focus on data privacy and export restrictions impacting operational costs and R&D activities [34][39]. Summary by Sections Industry Outlook and Considerations - The business performance in 2024 exceeded 2023 but remained below expectations, with local players facing commercialization pressures [14]. - A significant portion of respondents (54%) believe their business performance in 2024 will surpass that of 2023, indicating cautious optimism [15]. - The overall economic value cycle remains a critical factor for stakeholders, with a focus on "going out" strategies and increased business development efforts [18]. Market Sentiment - A majority of stakeholders (63%) hold a positive outlook for their business in China for 2025, with only 6% expressing negative views [22][24]. - Local players are more optimistic about growth compared to foreign players, who anticipate lower growth rates [24]. Regulatory and Technological Impacts - The regulatory framework in China is perceived to be tightening, with nearly half of respondents indicating increased constraints [35]. - Data privacy and export restrictions are leading to higher operational costs, with 45% of respondents acknowledging this impact [39]. - The adoption of digital technologies and the need for compliance with local regulations are becoming increasingly important for companies operating in China [41][43]. New Business Investment Strategies - There is a notable shift towards investing in new market channels beyond traditional hospital channels, with 76% of respondents deploying new channel investments [47]. - The relaxation of foreign investment regulations has intensified local competition, prompting a surge in investments across the value chain [49][50]. - Local players are increasingly focusing on R&D localization and clinical trials, with about 70% reporting increased investment in these areas [50].

Investment Rating - The report does not explicitly provide an investment rating for the Chinese life sciences and healthcare industry Core Insights - The overall sentiment towards the Chinese market has shifted positively, with 42% of respondents expecting revenue growth above 10% in 2025, compared to 39% in 2024 [24] - The majority of respondents (76%) are deploying new channel investments, indicating a strategic shift towards diversifying distribution channels [47] - Regulatory changes and technological advancements are critical factors influencing business strategies, with a significant focus on localizing operations and enhancing compliance frameworks [35][41] Summary by Sections Research Framework - The survey was conducted from January to February 2025, involving 125 operators and investors in the Chinese life sciences and healthcare industry [4] Industry Outlook and Considerations - In 2024, business performance exceeded 2023 levels but remained below market expectations, with 54% of respondents indicating better performance than the previous year [14] - The economic benefits of product life cycles remain a top consideration for stakeholders, with a strong emphasis on expanding business operations domestically and internationally [18] Market Sentiment - The attractiveness of the Chinese market has decreased compared to previous years, with 59% of foreign companies facing increased internal competition for investment resources [30] - Despite this, local companies are optimistic about growth, with many private enterprises having marketable products [23] Strategic Initiatives - Companies are focusing on optimizing marketing and sales teams, with 82% of respondents adjusting their strategies to adapt to new market channels [22] - There is a notable shift towards localizing R&D investments, particularly among domestic firms, in response to relaxed foreign investment restrictions [50] New Regulatory and Technological Impacts - Nearly half of the respondents believe that the regulatory framework in China has tightened, particularly affecting local companies [36] - The integration of digital technologies and data compliance is becoming increasingly important, with 44% of respondents indicating a need to adjust talent strategies to enhance digital capabilities [41] Changes in Commercial Investment Strategies - The report highlights a significant decrease in the preference for collaborative models among foreign companies, with only 43% favoring partnerships compared to 66% in the previous year [47] - A majority of companies are increasing investments in local supply chains and clinical trials, reflecting a strategic pivot towards enhancing domestic capabilities [50]

Investment Rating - The report does not explicitly provide an investment rating for the Chinese life sciences and healthcare industry Core Insights - The overall sentiment towards the Chinese market has improved, with 42% of respondents expecting revenue growth above 10% in 2025, compared to 39% in 2024 [24] - The majority of respondents (76%) are deploying new channel investments, indicating a shift towards diversifying distribution strategies [47] - Regulatory changes and technological advancements are critical factors influencing business strategies, with a significant focus on localizing operations and enhancing digital capabilities [41][42] Summary by Sections Research Framework - The survey was conducted from January to February 2025, involving 125 operators and investors in the Chinese life sciences and healthcare industry [4] Industry Outlook and Considerations - In 2024, 54% of respondents reported better business performance compared to 2023, although many faced commercialization pressures [14] - The economic benefits of product life cycles remain a top consideration for stakeholders, with a strong emphasis on expanding business operations domestically and internationally [18] Market Sentiment - The attractiveness of the Chinese market has decreased compared to previous years, with 59% of foreign companies facing increased internal competition for investment resources [30] - Only 6% of respondents expressed negative sentiments about the market outlook for 2025, indicating a recovery in market confidence [24] Strategic Initiatives - Companies are focusing on optimizing marketing and sales teams, with 82% adjusting their strategies to respond to new market channels [22] - There is a notable shift towards localizing R&D investments, with 66% of respondents increasing their local R&D expenditures following the relaxation of foreign investment restrictions [50] New Regulatory and Technological Impacts - Nearly half of the respondents believe that the regulatory framework in China has tightened, particularly affecting local companies [36] - The integration of digital technologies and data compliance frameworks is becoming increasingly important for businesses operating in China [41] Changes in Commercial Investment Strategies - The report highlights a significant decrease in the preference for collaborative models among foreign companies, with only 43% favoring partnerships compared to 66% in the previous year [47] - The focus on local supply chain investments has increased, particularly among domestic firms, as they adapt to new market conditions [50]

China LSHC Industry Survey 2025 State of Industry in China China Life Sciences & Health Care Team March 2025 Content © 2025. For information, contact Deloitte China. China Life Science & Health Care Industry Survey – 2025 State of Industry in China 2 ◼ Framework ◼ Results – Questions & Deep-dive • China LSHC Business Outlook & Considerations • New regulatory and technology impact • New shifts in business investment strategy ◼ Concluding insights ◼ Appendix Framework © 2025. For information, contact Deloitte ...

Investment Rating - The report does not explicitly provide an investment rating for the industry Core Insights - Achieving net-zero greenhouse gas emissions by 2050 requires a fundamental transformation of society from a fossil fuel-centric model to a highly renewable and electrified energy system [4][10] - The aviation and shipping sectors are particularly challenging to decarbonize, necessitating the use of low-carbon fuels such as biofuels and synthetic fuels, which have higher energy densities than hydrogen and electricity [4][5] - Deloitte forecasts that CO2 emissions from aviation will stabilize before 2030 and decrease by approximately 75% by 2050, while shipping is expected to achieve nearly net-zero emissions by 2050, with a reduction of 95% [5][52] Summary by Sections 1. Achieving Net-Zero Emissions Requires Significant Low-Carbon Fuels - To limit global warming to 1.5°C, net-zero emissions must be achieved by 2050, necessitating a shift from fossil fuels to renewable and electrified energy systems [13] - Heavy industries and transportation sectors, particularly aviation and shipping, require high energy density fuels, making low-carbon fuels essential [15][16] 2. Last Mile Decarbonization: Aviation and Shipping - Both sectors must transition to lower greenhouse gas emission transport modes and improve operational efficiencies to reduce fuel consumption [25] - Aviation is projected to see a 2.5x increase in total transport volume from 2023 to 2050, driven by economic growth and increased connectivity [27] 2.1 Aviation Decarbonization - Aviation's CO2 emissions are expected to remain stable until 2030 and then drop to 240 million tons by 2050, a 75% reduction from current levels [30][35] - Sustainable aviation fuel (SAF) is projected to account for 70% of aviation energy consumption by 2050, with synthetic kerosene becoming a major low-carbon fuel source [30][35] 2.2 Shipping Decarbonization - Shipping is projected to grow at nearly 2% annually until 2050, with low-carbon fuels like methanol and ammonia expected to account for 70% of fuel consumption by that year [42][46] - The shipping sector's energy intensity is expected to decrease significantly due to efficiency improvements and the adoption of low-carbon fuels [44] 3. Unlocking the Decarbonization Potential of Synthetic Fuels - Synthetic fuels are anticipated to play a crucial role in decarbonizing aviation and shipping, with a projected need for 150 million tons of sustainable hydrogen and 700 million tons of climate-neutral CO2 by 2050 [5][6] - The production of synthetic fuels requires substantial clean electricity, estimated at 10,000 TWh, which exceeds current global renewable energy generation [6][7] 4. Call to Action - Policymakers must create a supportive regulatory framework and provide economic incentives to facilitate the transition to low-carbon fuels [12] - Collaboration among stakeholders, including fuel suppliers, manufacturers, and infrastructure providers, is essential for the successful adoption of synthetic fuels [12][10]