We identify and empower entrepreneurs and venture capitalists to seek to eliminate bottlenecks in the technology and healthcare sectors in China.
China's renaissance has occurred at an unprecedented pace in human history: It is today the largest consumer and producer on earth. The average Chinese has a life expectancy longer than an average American. Absolute poverty has been eliminated.
However, we believe China is now facing its biggest challenge to date: a massive aging demographic. The larger the challenge, the greater the opportunity.
China leads the world in chronic disease incidence, with more than half of the world’s new cancer and diabetes cases. This is a function of rising life expectancy but also of the challenges brought forth by urbanization, including environmental pollution and unhealthy changes in diet and lifestyle.
Our investment purpose in this vertical is to solve China’s unmet medical needs via:
• Bringing innovative treatments to China • Building domestic service ecosystems to support future local innovation
Bring innovative treatments to China While 90% of drugs registered in China today are generics, China’s innovative drugs segment continues to grow 10% annually. Many factors account for this growth: (i) Availability of returnee Chinese scientist and engineer talent, (ii) Supportive government regulation, and (iii) Healthcare-friendly private and public capital markets.
We back the managers and entrepreneurs who connect talent and technology to import existing and/or innovative treatments from developed nations to China. They then leverage their network, experience and know-how to bring these treatments to market.
Build domestic service ecosystems to support future local innovation Increasing domestic innovation reveals a stark lack of quality service solutions as systemic bottlenecks are beginning to form. China's specific needs inlcude more specialized CROs (Contract Research Organizations) with strong project management and scientific expertise to accelerate the drug development process. China also needs more CDMOs (Contract Development Manufacturing Organization) to streamline CMC (Chemistry, Manufacturing and Controls) processes when the drugs begin to be manufactured.
We back local R&D and manufacturing service providers in mission critical bottlenecks to ensure that China’s continuing innovation in healthcare can endure for the long run.
China’s labor force is dramatically shrinking with the aging population. This causes concern for future growth as China's initial economic growth is attributed to its access to low cost labor inputs. As labor becomes ever more scarce and costly, China must improve productivity to continue to grow its GDP going forward.
Our investment purpose in this vertical is to optimize efficiency of Chinese businesses via:
• Platform business models • Enterprise service technologies
Platform business models The degree of fragmentation in many of China’s industrial sub-verticals is mind boggling. It is difficult to identify leading domestic industrial players from China despite it being the world’s largest manufacturing country. But many ingredients are now in place to consolidate these sectors: (i) Slowing economic growth and rising wages are forcing businesses to focus on optimizing efficiencies, (ii) Favorable government policies to encourage industry upgrading, and the (iii) Pervasiveness of the internet and digitization.
Enterprise service technologies Despite the rise of domestic consumer internet giants like Alibaba, Baidu and Tencent, China’s digital economy as a whole continues to lag those of its peers in the West. This is primarily due to low level penetration of enterprise solutions into traditional industries.
The onset of the global technology contest underscored to Chinese businesses the importance of nurturing an innovative domestic technology ecosystem to ensure continuity of access to mission critical components. This has led to a surge in demand for Chinese technology solution companies.
We invest in managers and entrepreneurs bringing new models and tools to upgrade traditional industries in China.
New China Perspectives
A weekly research newsletter
June 25, 2021
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China Investment Environment #4
May 21, 2021
China Investment Environment #3
April 30, 2021
China Investment Environment #2
April 23, 2021
China Investment Environment #1
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March 25, 2021
Corporate Venture Capital Pt IV
March 19, 2021
Corporate Venture Capital Part III
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Corporate Venture Capital Part II
February 24, 2021
Corporate Venture Capital Part I
February 12, 2021
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