‘Capital Winter’ Chills Investment in China’s Health Care Industry

Data shows funding for the sector continues to decline from its 2021 peak, plummeting to $5.7 billion in the first half of 2023

China’s cutting-edge drug developers are feeling the pinch from a continued contraction in investment, with some having to make massive layoffs or abandon non-core businesses to survive what has been dubbed a “capital winter.”

After peaking at $34 billion in 2021, funding for China’s health care industry more than halved to $15.6 billion last year and continued to fall to $5.7 billion in the first half of 2023, according to a recent report by medical service provider VBData and its affiliate VCBeat Research.

“This capital winter is worse than I thought,” Zhu Zhongyuan, founder and CEO of Shanghai-based innovative drugmaker DualityBio, said at the annual China Biomed Innovation and Investment Conference held in the eastern city of Suzhou in late September.

He warned that pharma companies will face a prolonged cash crunch as it remains unclear how long the spell will last before investment heats up.