As US-China pharma rivalry heats up, can Hong Kong’s US$8b fund be the global bridge?

Hong Kong is making significant strides in investing in biotech companies, aiming to become a key player in China's bid to rival the United States in the global pharmaceutical market. The Hong Kong Investment Corporation (HKIC), managed by the Hong Kong government, oversees an investment portfolio worth approximately US$8 billion. The portfolio encompasses a wide range of healthcare sectors, including traditional Chinese medicine, Western medicine, prevention, diagnostic treatments, and surgical operations.

Clara Chan Ka-chai, CEO of HKIC, highlighted the diversified nature of the portfolio during the Global Health Summit in Hong Kong. She emphasized the company's efforts in integrating artificial intelligence (AI) and large language models with drug discovery firms, aiming to make the process of developing new medicines more efficient, affordable, and effective. Since its inception, HKIC's internal rate of return on the portfolio has been 14 percent as of the end of 2025.

As tensions between China and the United States in the pharmaceutical and life sciences sector escalate, Hong Kong's role as a linchpin in this rivalry has come under increased scrutiny. The US has implemented measures, such as the Biosecure Act, aimed at curbing China's biotech ambitions. In response, China's Ministry of Commerce added US DNA-authentication firm Applied DNA Sciences to a countermeasures list, citing allegations of supporting US sanctions against Chinese companies over accusations of forced labor in the Xinjiang Uygur autonomous region.

Medical professionals and political leaders at the summit discussed Hong Kong's role in this global biotech race. Lu Shun, a medical professor at Shanghai Jiao Tong University, noted that China has made significant progress in drug development, including the first country to research a drug resistance problem affecting 15 percent of lung cancer patients.

China's drug EGFR gene mutation treatment has been approved two years ahead of its US counterpart. Additionally, China is on par with the US in the development of antibody-drug conjugates.

Ko Wing-man, director of New Frontier GBA Healthcare, stressed Hong Kong's position as a bridge between mainland manufacturing capabilities and global capital markets. He highlighted the city's ability to combine leading basic research with mainland China's vast manufacturing potential, engineering excellence, and expanding innovation capacity. Ko also pointed out that Hong Kong could serve as the international gateway for China's life sciences industry.

HKIC has focused its healthcare investments on liquid biopsies, female health, and longevity science, among others. The fund has attracted over US$8 of long-term market and international capital for every US$1 invested. About 70 percent of its investment capital has been allocated to early and growth-stage companies. As of Friday, 11 companies in HKIC's portfolio have listed on the Hong Kong Stock Exchange, with another 30 in the process of submitting applications for an initial public offering this year.

The surge in technology-driven listings, particularly in healthtech and pharmaceutical sectors, has prompted Hong Kong's bourse to overhaul its listing framework in order to better accommodate high-growth enterprises seeking access to international capital.