In case you were an executive of a Western pharmaceutical company, would you invest in China? Francesca Spigarelli and Andrea Filippetti believe that you should definitely consider it.

Francesca Spigarelli and Andrea Filippetti focus in their chapter “Grasping Knowledge in Emerging Markets: Is This the Case of Western Companies in China?” in the book “China´s Influence on Non-Trade Concerns in International Economic Law” on the hidden potential of the Chinese pharmaceutical market. Chinese internal market is becoming an increasingly attractive location for foreign direct investment, which might serve also as a strategic platform to penetrate other Asian markets. The economic growth of China is also inextricably connected with lifestyle changes of the Chinese population. The people live longer, consume more and have higher aspirations concerning their living standards, which is also reflected in the changing patterns in their consumer behavior on the pharmaceutical market. The Western medical treatment is gradually gaining in popularity, which makes the country increasingly attractive also for Western pharmaceutical companies. China ranks now as the third biggest pharmaceutical market in the world and according to the estimates, it should become the second biggest one after the United States by 2020. The internationality of the Chinese pharmaceutical market is underscored also by the fact that three out of the five major pharmaceutical players in China are international companies. AstraZeneca, Pfizer, and GlaxoSmithKline have established a firm ground in China and are able to compete with major Chinese companies in this field, such as Yangtze River Pharmaceutical Group and Northeast Pharmaceutical Group Company Limited, specializing among other things also in Traditional Chinese Medicine. There is also a reversed side to the attractiveness of the Chinese market: Chinese environmental legislation and safety laws are still less strict than corresponding laws in the Western countries, which makes it easier for pharmaceutical companies to operate in China. The time will tell whether future will bring any changes in this regard. Still, even though the environmental legislation and safety laws might become stricter, the Chinese market will still be an attractive location for Western companies.