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Biomedical Sectors Get State Aid
The domestic biomedical sector is set for a government-backed boost, helping it overcome problems of a lack of research money and low-value products.
"The government is formulating preferential policies to encourage the development of the biopharmaceutical industry,"said Liu Qian, director of the bio-engineering centre under the Ministry of Science and Technology.
The biomedical industry could benefit from favourable policies like those enjoyed by the software industry, he said.
In addition to the financial support offered by the government, the new policies include favourable considerations for biomedical companies considering going public, tax-free treatment for venture capital invested in related industries and prolonged periods of tax cuts for such enterprises.
Liu also said the government will in the coming five years allocate four to five times the total research fund given to the sector in the past 15 years.
The Ministry of Science and Technology has arranged a sum of venture capital worth 1.2 billion yuan (US$150 million) to invest in 700 projects this year.
Biomedicine and computer technology will be this year's focus, according to the ministry, which hopes to incubate a group of high-tech firms capable of competing with international companies.
Most of the projects come from non-State-owned companies, especially the start-ups from the research houses of universities and colleges.
China is expected to establish 20 world-level research and development bases in the future to enhance its ability in genetics, bioinformation and bio-chip research, Liu said.
"We expect the whole level of the industry will be upgraded to the world-advanced line in the next decade," Liu said.
China's biomedicine industry is projected to grow between 15 per cent and 20 per cent annually to reach an output of US$5 billion by 2005, then jump to US$14 billion by 2015.
However, compared to the bright future of the industry, the domestic manufacturers are engaged in a price war led by an oversupply.
For example, the price of a tube of the drug EPO (erythropoietin) dived to 19 yuan (US$2.29) from 90 yuan (US$10.87) two months ago.
Yao Hua, manager of the planning department with the Chengdu-based Di'ao Group, the pioneer in the price-cutting war, said the oversupply and high costs stemmed from the lack of funding for research and development.
"Because of no money, we cannot develop more new drugs and study how to lower the cost," Yao said.
Yao said the government's assistance is necessary at the industry's fledgling period.
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