Core Insights - The Chinese innovative drug sector is experiencing strong support from government policies aimed at accelerating research and improving payment systems for innovative drugs [1][4] - The Hang Seng Biotechnology Index has shown significant growth, with a year-to-date increase of 57.84%, outperforming other indices [2] - The average increase of the top ten stocks in the Hang Seng Biotechnology Index is 88%, indicating robust performance in the innovative drug sector [3] Policy Support - The National Healthcare Security Administration and the National Health Commission have released measures to support the high-quality development of innovative drugs, including a fast-track approval process for clinical trials [1][4] - The "14th Five-Year Plan" emphasizes innovation as a fundamental principle for the development of the pharmaceutical industry, with specific support for innovative drug development [4] Market Performance - The innovative drug sector has attracted significant capital inflows, with southbound funds in Hong Kong stocks reaching 703.15 billion RMB by July 8, 2023 [6] - The Hang Seng Biotechnology ETF has seen a year-to-date growth of 55.68%, reflecting strong investor interest in the sector [6] Future Outlook - Analysts predict that the innovative drug sector will continue to show strong long-term growth potential, with a significant gap between the contribution of Chinese companies to global drug pipelines and their market valuations [7] - The overall valuation of the Hang Seng Biotechnology Index remains low compared to historical levels, suggesting room for further growth [7]