What's The Next Big Thing Besides China?

By Rob Wright, Chief Editor, Life Science Leader
Follow Me On Twitter @RfwrightLSL

You don’t have to look too far to find negative news involving China. From months-long protests in Hong Kong over a proposed extradition bill, to trade war tariffs, to intellectual property theft charges being brought against Chinese engineers and scientists working for multinational companies, it seems the warm relations between the United States and the People’s Republic of China (PRC) have cooled — significantly. But it is my hope that we will soon get these things sorted out, because like it or not, the U.S. and China are hugely important to one another. And while the U.S. is currently the world’s largest economy, that could soon change — and as early as next year.

Here’s a fun fact. When China began implementing economic reforms in 1978, the country’s gross domestic product (GDP) ranked ninth in the world. Just 22 years later, the PRC had climbed all the way to second, albeit somewhat distant when compared to the U.S. (i.e., $3.7 trillion versus $10.2 trillion).

A 2019 report issued by Standard Chartered Bank anticipates the China economy to grow to $29.9 trillion by the end of 2020. During that same time period, the United States is expected to reach to $22.2 trillion. As you can see, it is projected that the PRC will surpass the U.S. not by a little — but a lot! Further, by 2030 they forecast the U.S. to be a distant third, with an economy $15 trillion shy of India, and less than half that of China. And if that isn’t sobering enough, when you consider that the PRC’s and India’s populations are both four times that of the U.S. and experiencing significant growth in their middle class, you quickly realize their potential. But unlike the days when we viewed these countries as sources of inexpensive labor for the manufacture of goods for U.S. consumers, those who see the opportunity today understand that the future resides in making goods in China and India — for those countries’ citizens. Assuming these predictions hold, China’s GDP will have grown by greater than 177 percent, compared to the U.S.’s 60 percent. However (and this is a big however), India’s economy is expected to increase by a staggering 387 percent! Consider that healthcare spending in the U.S. represents 18 percent of GDP. This translates into roughly $3.5 trillion for a population of 329 million. Even if India and China prove more efficient at delivering healthcare to their combined 2.8 billion people, if that makes up just 10 percent (hypothetically) of their GDP, that still equates to $4.6 and $6.4 trillion respectively. So, while opportunity can be spelled as C-H-I-N-A, I-N-D-I-A, or B-O-T-H, it shouldn’t be spelled M-I-S-S-E-D. Which means, we better figure out how we can work better with these countries now if we hope to profit in their future.

This month’s feature involves an American entrepreneur who saw the biopharmaceutical opportunity of China long before most. John Oyler is the CEO of BeiGene, an $8.5 billion publicly traded biopharmaceutical company he helped cofound back in 2010. We hope you enjoy learning of Oyler’s journey to build BeiGene. Because while it’s a biopharmaceutical company with foundational roots in China, its aspirations are to be truly global.