Are Chinese Life Science Parks a Good Entrepreneur Opportunity?

27 Jul

By James Huang, Research Analyst, LSN

james-wpIn 1988, Beijing Zhongguancun Science Park opened for operations. Ever since, science parks have become a go to strategy for Chinese cities who wish to develop specific technology industries. Science parks are zones containing various high-tech facilities such as labs, housing, medical facilities, etc. that are being built by the Chinese government to encourage the development of technology and industry.

At present, many new science parks are popping up in smaller cities across China. These institutions are looking for companies to move into their facilities. In fact, several of these science parks such as the Chengdu Tianfu International Bio-Town have been holding events in the USA to gauge how willing U.S. life science startups are to relocate to their new facilities in China. This poses the question then of whether relocating or opening a subsidiary would be worthwhile for a U.S. based life science company.

Here are some of the benefits that these science parks typically advertise:

  • Newly constructed facilities
  • Support from the government if accepted into the park
    • Many of these science parks are run by the local governments
  • Access to newly graduating talent from universities partnered with the parks
  • Infrastructure in place to allow easy access of larger cities (i.e. Shanghai, Beijing, etc.)
    • Many of these cities have built high speed train systems to allow for travel to major cities.
  • Easier access to Chinese investors
  • Partnership opportunities with other companies in the park

However, one should keep the potential difficulties in mind:

  • Relocating or creating a Chinese subsidiary isn’t a simple task
  • Many of these life science parks are in small cities, rather than major hubs like Beijing and Shanghai
  • Many Chinese investors are already active outside of China and can be reached with the right connections already.
  • Being fluent in Chinese is highly recommended
  • Cultural differences between China and U.S. might create difficulties

Of course, there are still many factors to consider before anyone can truly decide whether joining a science park program would be worth it. Furthermore, each individual park would have its own unique strengths and weaknesses which must be considered as well. Some science parks are still mostly concepts and have only been partially constructed! It’s important to do your due diligence if you’re considering an opportunity like this.

These science parks present an interesting opportunity for life science startups hoping to work in Chinese markets, but it’s important to remember that there are other ways to connect with investors and strategic players from China and the broader Asia region. LSN’s Investor Platform tracks over a hundred investors based in China, and many of these investors have created cross-border investment vehicles and regularly visit the US to participate in life science investment events, in which the RESI Conference has been leading the way by opening a North America-Asia Investment and Partnering track. While there may be advantages to joining a science park in China, you can make connections with China-based partners without the headaches of relocating.

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