Five Major Health Headlines: China's Current State of Play
A transformative social welfare policy. Record-breaking biotech partnerships. A new reimbursement landscape. Tariff silence... and another viral outbreak?
The past few weeks have seen several major developments arise in China’s health landscape, across policy, market structure, industry and public health. Taken together, they offer crucial signals of where China’s health system, market and strategic priorities are heading next.
You may have come across parts of these headlines already, but I wanted to review and piece together the deeper meaning behind what has been unfolding. Among the noise, I’ve selected five significant topics that I believe deserve close attention.
Whether you're an investor, industry leader, academic, clinician or China watcher, each one highlights changes that will most certainly impact your work and research in the months and even years ahead. We’ve already been tracking these dynamic developments for our biopharma and healthtech clients at LINTRIS Health consultancy, building out strategy around portfolios, markets and pipelines. But I wanted to offer a broader view here at China Health Pulse, along with a few reflections I haven’t shared elsewhere. Where relevant, I’ve linked to earlier CHP posts that explore each theme in more detail.
Let’s begin:
POLICY: transformative national childcare & preschool subsidies - new social welfare policies that mark a pivot in China's approach to family support and demographic strategy.
MARKET STRUCTURE: reimbursement and the new Commercial Insurance Drug List - new pricing dynamics signal China’s active support for its private health sector.
INDUSTRY: record-breaking biopharma partnerships - Chinese biotech is hotter than ever, and foreign big Pharma are rushing to buy in and partner.
PUBLIC HEALTH: a virus outbreak in Southern China - fear-mongering headlines need myth-busting.
GEOPOLITICS: silence on cross-border pharma tariffs - it’s still watch-and-wait mode.
1. POLICY: A Groundbreaking National Childcare Subsidy, With Free Preschool on the Way
On 28th July, China launched its first-ever universal childcare subsidy (育儿补贴). Starting retroactively from January 1, 2025, families will receive 3,600 RMB (~$500 USD) per child per year until age 3, for those born from January 1, 2022 onward, regardless of region, ethnicity or birth order. Backed by 90 billion RMB (~$12.56 billion USD) in central funds from the Ministry of Finance and overseen by the National Health Commission, over 20 million families are expected to benefit.
The following day, the State Council announced a companion plan to roll out free preschool education starting September 2025. Fees will be waived for children in their final year of public kindergarten (aged 5–6), with equivalent subsidies extended to approved private kindergartens. The central government will cover 50–80% of local costs, depending on regional income levels, with projected household savings of 60 billion RMB annually.
The subsidy will be funded by government budgets and works alongside other levers like tax breaks, housing support, education reform, and paid parental leave. According to NHC Deputy Guo Yanhong, the approach draws on international examples of pro-natalist strategies which have operated long-standing family benefit systems. Indeed, the UK provides child benefits of £1,248 per year for the first child and £826.80 for each additional child, and Germany provides €3,000 per year per child through Kindergeld. By contrast, the US has no permanent universal child allowance since the expiration of the 2021 Child Tax Credit. China’s ~$500 benefit is much smaller in monetary terms, but its national rollout, simplicity and universality mark a major policy inflection point.
Why this matters
These measures represent the most direct, centrally funded parenting support China has introduced since 1949. At the 2025 Two Sessions (see my posts: Part 1 / Part 2), top leaders reinforced the idea of social support as economic stimulus. These family policies are part of that strategic logic.
“Research and formulate support policies to encourage childbirth, improve the fertility support system, and develop inclusive childcare services.” - Li Qiang, Premier, 2025 Government Work Report, 5th March 2025
China’s central government is stepping in more forcefully to address declining birth rates, deepening gender inequalities and the economic drag of a rapidly ageing population, with highly coordinated interventions. The aim is to shift care costs from households to the state, freeing up consumption and anchoring longer-term demand. This signals deeper investment in building a birth-friendly society that can support workforce size, productivity and domestic consumption decades ahead.
What to watch
The modest 3,600 RMB covers only a fraction of real childrearing costs, and local implementation will depend on whether local governments receive and deploy funds effectively. But it reflects a broader change. China is laying the groundwork for a national family policy infrastructure, embedded in long-range demographic strategy.
For stakeholders across consumer health, paediatrics, diagnostics, women’s health and early-life services, this opens up new and exciting opportunities for policy alignment and market access. We can expect public–private collaborations to expand in areas like parenting platforms, maternal mental health, early screening and integrated community care, among others.
Related:
Health and the Two Sessions (Pt 1 of 2): What China’s Top Political Event Really Revealed This Year
2. MARKET STRUCTURE: New Commercial Drug List Signals China’s Commitment to Private Health Sector
On July 1, China’s National Health Commission and National Healthcare Security Administration (NHSA) jointly unveiled the long-anticipated Commercial Insurance Innovative Drug List (CIIDL), the first national policy specifically enabling commercial insurers to reimburse certain innovative drugs. It’s an important signal that China now sees its private health sector as a strategic pillar, and not just a supplement to public coverage.
The CIIDL will cover “high clinical-value drugs beyond the scope of basic medical insurance”, targeting medicines not included under the National Reimbursement Drug List (NRDL). This is the essential, hard-to enter list of products under public health insurance which is both the bane and the aspiration of biopharma companies – which I will cover in more detail in a future post.
This announcement hasn’t made many major international headlines but the implications are highly significant for pharma, payers as well as China’s long-term access model. Private hospitals, VIP wings and high-end clinics will be able to have formal access to drugs previously unreachable through public insurance.
Why this matters
China’s public insurance is expansive and centralised, covering more than 95% of the population (1.327 billion), via a national pooled medical insurance fund of 3.86 trillion yuan ($539.1 billion by end 2024), as reported by the NHSA, China’s health insurance bureau, with 3,159 NRDL-listed medicines as of 2025. The NRDL remains the key gateway for market access, coverage and scale, but it imposes heavy price cuts, long delays and strict inclusion criteria, as it is designed for high-burden diseases, not low-prevalence innovation, making it unviable for many high-cost or early-stage therapies.
The new CIIDL may offer an alternative and enticing pathway: speed, flexibility and pricing discretion for drugs unsuited to NRDL negotiation. Importantly, CIIDL-listed drugs can bypass certain public insurance constraints, such as cost-sharing caps, volume-based procurement substitution and DRG spending limits, which commonly restrict early market access.
This is particularly relevant for innovative drug pipelines like cell therapies, rare disease treatments and next-gen oncology products that need clinical traction and commercial visibility before price negotiation, but often face delays or budget blocks under the NRDL. The CIIDL’s emphasis on price confidentiality may also enable multinationals to better manage reference pricing across markets. In addition, the NHSA has flagged upcoming data-sharing infrastructure for hospitals, payers and pharma, which could enable risk-based pricing models that insurers have so far lacked.
What to watch
China’s intent is clear, but it’s still too soon to tell. Market response and infrastructure development in the next months and years will be very interesting to follow. The real impact will depend on whether the insurance ecosystem matures fast enough to meet the policy ambition.
Currently, commercial health insurance still accounts for approximately just 4.2% of total health expenditure (even though this is already a four-fold increase within a decade). Most commercial insurers remain loss-making in health plans, so without better pricing tools, regulatory guidance or premium volume, few may willingly take on high-cost CIIDL drugs. In the near term, CIIDL-listed therapies may see coverage limited to top-tier cities, high‑income patients and hospital systems already familiar with commercial billing.
Still, this policy sets precedent. The CIIDL is not meant to replace public access, but to expand access overall. It opens a new frontier for innovative biopharma companies facing NRDL bottlenecks, who want to establish presence in China’s premium-tier market while building clinical and policy data for future reimbursement listing.
The CIIDL formalises a dual-access health system, where public reimbursement provides scale and equity, and private coverage supports innovation and premium-tier therapy access. This blended model may well define the next decade of healthcare system evolution. Success for industry stakeholders will depend on their fluency in both public and private strategies, and on their agility to navigate the shifting incentives, data regimes and reimbursement pathways.
Related:
3. INDUSTRY: Major Cross-Border Biotech Partnerships Reinforce China’s Innovation across Global Pipelines
28th July saw one of the largest and most significant China–West biopharma partnerships in recent history. UK giant GSK signed a record-breaking deal worth up to $12 billion with one of China’s top biotech, Hengrui Pharma. It includes $500 million in upfront payments, to license global (ex‑China) rights for up to 12 oncology assets.
This is not a one-off. It reflects a shift in global pipelines, from importing innovation into China, to exporting innovation out. In May, Pfizer acquired global rights to China biotech 3SBio’s PD-1/VEGF bispecific candidate SSGJ-707, alongside an equity stake and up to $4.8 billion in milestone payments, to manufacture and commercialise abroad. And earlier in July, AstraZeneca signed a $5.3 billion deal with China’s CSPC Pharma, which includes AI-led co-development of novel assets in oncology and chronic diseases, with $110 million in upfront payment. This followed AZ’s $2.5 billion investment into a new global strategic R&D centre in Beijing. Late last year, Merck also licensed a GLP‑1 candidate from Hansoh Pharma worth up to $1.9 billion.
Why this matters
China is no longer on the periphery of global biotech. It’s now a credible and competitive source of quality assets. Western pharma is shifting from tentative engagement to full-scale partnerships, especially in oncology, immunology and metabolic disease, where Chinese science has demonstrated delivery both speed and scale.
Several structural drivers are powering this shift: faster trial timelines, lower R&D costs, strong government support and increasingly robust early data. After years of scrutiny over IP and quality, Chinese assets are now headlining at global medical meetings, including ASCO, ESMO and AHA, to set benchmarks for first- and best-in-class in emerging modalities.
The pace of innovation is ever-accelerating. Since 2022, Chinese firms have developed 639 first-in-class candidates. This is a 360% increase from 2018–2021, outpacing the US, EU and Japan. Investor sentiment has followed. In the first three months of 2025, 32% of out-licensing biotech deal value occurred in China versus 21% reported in both 2024 and 2023. And the Hang Seng Biotech Index, which tracks the 50 largest biotech, pharmaceutical, and medical device companies listed in Hong Kong, is up 61.8% year-to-date, which is three times the return of the broader Hang Seng Index’s 20.6%.
What to watch
These billion-dollar deals provide strong validation for China’s biotech. The sector has crossed a credibility threshold, and is now being actively built into global drug pipelines. But success depends on execution. Trial protocols, IP transfer and regulatory harmonisation all remain key friction points. Some assets will stall, and others will expose the limits of current cross-border coordination - we will have to wait and see.
Nevertheless, Chinese biotechs are now actively evolving their business models to no longer focus only on the domestic market. They’re now designing trials, collecting real-world data and investing in manufacturing with global out-licensing as a primary objective from the outset. And Western pharma is also continuing to adjust. In-licensing from China, through dedicated China sourcing teams, new BD structures and early engagement mechanisms, is becoming a firm pillar of pipeline strategy.
Geopolitical risk remains the wildcard. So far, regulators in the US and Europe have taken a hands-off approach, as long as IP stays clean and commercial control remains with Western firms. But even if the form of cross-border deals shifts, the fundamentals cost, speed, and scientific quality are simply too attractive to ignore. China’s outbound innovation will certainly continue to be a growing force in global pipelines.
Related:
4. PUBLIC HEALTH: The Chikungunya Virus Outbreak Receiving Hyper Media Attention
China is facing its largest chikungunya outbreak since it first appeared in-country in 2008. Confirmed infections have surged from 478 to 3,000 and now to over 7,000 cases within weeks, as the mosquito-borne tropical virus spread from Foshan in Guangdong province, across to Hong Kong, Macau and Hunan Province. The rapid escalation has pushed the situation onto the international stage to garner significant media attention.
The root cause of China’s outbreak has been attributed by both Chinese authorities and international health experts to climate change: amplified by Guangdong’s second-heaviest monsoon rains on record, which created ideal conditions for Aedes mosquito breeding.
Globally, the virus is non-fatal in most cases, with severe illness and deaths typically occurring in young infants, the elderly or those with pre-existing conditions. Official figures for 2025 report around 90 deaths across 16 countries, out of approximately 240,000 confirmed cases. The WHO recommends protection from mosquito bites through repellant, long-sleeved clothing and nets, and to destroy breeding grounds including stagnant water and debris.
Why this matters
Chikungunya is active globally and has been for decades, with endemic and epidemic spread documented in South America, Africa, Asia and Europe. Brazil alone has reported over 185,000 cases so far this year, and France has recorded 800 cases since 1st May. The current wave began in early 2025 with outbreaks in the Indian Ocean. The last epidemic in 2004–2005 in the same region affected nearly half a million people .
Media coverage has concentrated more heavily on China, despite Brazil having higher overall case counts, likely due to the outbreak’s suddenness and political visibility. The US CDC has already issued a Level 2 travel alert for China. This reflects not just differences in outbreak patterns, but also post-COVID narrative sensitivities.
China is well aware that infectious disease flare-ups have become proxies for geopolitical tension. This outbreak is being framed internally not only as a public health challenge, but as a performance test of China's crisis management systems. Vice Premier Liu Guozhong personally toured Foshan on August 1, calling for a “decisive victory” and convening emergency coordination on mosquito eradication, strengthened surveillance and even port-of-entry quarantines, which are not routine containment steps, but mirror post-SARS and COVID-era vigilance.
What to Watch
The next days and weeks will reveal whether China can contain this outbreak locally, or if further geographic spread will follow. The current risk lies not in mortality but in scale. There are no approved treatments, but two vaccines exist globally although not widely available for use. China has not yet authorised either, and the current outbreak may accelerate regulatory attention or domestic R&D trial activity.
RT-PCR testing is available and effective within the first 8 days of symptom onset, though rapid testing scale-up remains a bottleneck. Diagnosis is further complicated by symptom overlap with dengue and Zika, both of which are also present in China.
Media interest is high, and China's response is under intense scrutiny. The line between public health control and political optics will be watched closely, particularly given China’s COVID legacy.
More importantly, this flare-up is a climate signal to the world. The Chikungunya virus was once confined to tropical zones, but its seasonal pattern is now shifting. The 2025 surge shows how fragile current preparedness remains, not just in China, but globally. More outbreaks are likely, and cross-border health coordination will need to become more predictive and less reactive, in order to build climate-health resilience.
Related:
5. GEOPOLITICS: Tariffs - a waiting game
I’ve written on pharma tariffs before (Part 1, Part 2), especially as they relate to China. They are now back in the headlines. New duties of 10–50% are live across dozens of countries, with Brazil facing the steepest increases. The US expects to collect $50 billion in tariff revenue, the highest in over a century.
Although China hasn’t yet been subject to tariff changes, including pharma-specific ones, that is set to shift very soon:
the US–China 90-day tariff truce ends on 12th August, with no extension confirmed. Meanwhile, pharmaceuticals remain under active review under the Biden-era Section 232 national security probe, with no end date announced.
On 5th August, Donald Trump told CNBC he would impose a “small” pharmaceutical import tariff first, rising to 150% within 18 months, and reaching 250% thereafter. “Because we want pharmaceuticals made in our country” he said, name-checking China and Ireland as countries where drugs are currently made for the US market.
Why this matters
While no new measures have landed yet, markets are already reacting. European pharma stocks fell to a four-month low, even as the European Commission reiterated its stance that any new global pharma tariffs must remain under a 15% cap it had agreed with the US.
Pharma firms in the US market now face pressure on multiple fronts. Trump’s proposed pharma tariffs are not China-specific, as he has referred to “many foreign nations” as targets of future duties, explicitly naming Ireland, India, and Germany as countries that produce for the US market but lack domestic manufacturing. If enacted, these measures could fragment global production, raise costs, and force a reshoring race that few are currently equipped for.
Multinationals have been actively recalibrating global supply chains over the past months. AstraZeneca recently committed $50 billion to expand US manufacturing and R&D capacity by 2030, after Eli Lilly, Johnson & Johnson and others had announced their commitments earlier in the year.
In contrast, many Chinese biotech companies with global ambitions, have future-proofed from the outset. Dual listings in Asia and the US, diversified manufacturing and multi-regional supply chains mean that they are insulated from geopolitical frictions. Their activities will likely continue to be untouched by tariffs, and their localised pipelines, trials and manufacturing infrastructure continue to stay resilient, even in a climate of heightened sensitivity.
What to watch
The next days and weeks will reveal what’s next for pharma and for China, with real-world consequences for drug supply, trade relations and healthcare affordability. Details on the opening tariff rate and rollout timeline will set the pace for downstream impact on cost structures and investment decisions. Industry groups and international allies (Europe, Australia, Canada, the EU) may lobby or initiate trade responses if pricing policy threatens global public health access.
China’s response has been restrained so far, but countermeasures could be on the cards, to target foreign drugmakers that move against its own exports. Overall, it’s looking to be an increasingly fractured pharma landscape, will affect global drug pricing, innovation partnerships and access to essential medicines for the global population.
Related:
Finally
Each of these developments signals a deeper shift in how China is rebalancing its health system, state–market dynamics, and geopolitical posture. I’ll be tracking these closely in the weeks ahead and sharing updates through the CHP newsletter as they unfold.
Please do share and comment - as always, I look forward to hearing what you all think.
Really interesting overview of the shifting dyamics in Chinese pharma. The Hansoh and Merck deal for that GLP-1 candidte is huge and shows how much global pharma is now looking to China for innovation rather than just as a market to sell into. The $1.9 billion valuation feels validating for the whole sector, especialy when you consider how competitive the metabolic space is right now. Curious to see how this asset performs in Western trials compared to what's already out there.