In the last year - and particularly since the beginning of 2006 - reports of US and European companies commencing or expanding their activities in China have become increasingly frequent. Similarly, the Chinese presence at exhibitions like Chemspec Europe and CPhI Worldwide has grown exponentially.
But fears that Chinese suppliers are planning to bring down the Western pharma industry by flooding it with cheap ingredients of dubious quality are largely misplaced. A recent visit to Shanghai convinced me that China is an opportunity rather than a threat.
The Chinese pharmaceutical market is expanding four times faster than the global growth rate and by 2010 it is forecast to be the sixth or seventh largest in the world. Virtually all the companies I spoke to stressed that their priority was to get themselves into a position to supply the vast and burgeoning domestic demand.
This will require some major restructuring. There are very few large pharma manufacturers in China, a higher but still relatively low number of medium-sized companies and a huge number of small enterprises. There is also a widespread recognition that quality standards leave something to be desired and that the lack of IP protection is a great concern to the rest of the world. But these issues are being addressed.
Chinese pharma has a superabundance of cheap labour and a wealth of scientific talent. What it lacks is the management skills and the infrastructure to supply effectively such a massive domestic market.
There is a great appetite among Chinese manufacturers to establish links with Western companies in a relationship that would be mutually beneficial: enabling the Chinese company to fill its skills gap and opening the way for its partners to enter the most populous market on the globe. The difficulty - on both sides - is selecting the most suitable partner. Fortunately, there are several companies, such as Pacific Genuity, capable of fulfilling the role of matchmaker.
On the day I left Shanghai, a couple of newspaper stories caught my eye: a company was fined several million dollars following the deaths of a number of patients caused by injectable drugs containing substandard materials; and warnings about the inappropriate prescribing and overuse of antibiotics, leading to drug-resistant strains of bacteria.
This just reinforced my view that, despite linguistic and cultural differences, the Chinese are essentially people like us.