Chemical industry capability as a safety net: China's innovative drugs + CXO enter a golden era

SadMoneyMeow · 2026-03-31T10:36:50+00:00

The war between Russia and Ukraine, as well as conflicts involving the US and Israel, has led to rising energy prices and damage to factory facilities. Chemical production capacity in Europe and the Middle East has declined, benefiting China's chemical industry, which has become a global winner. China's advantages in raw materials for biopharmaceuticals make European and American pharmaceutical companies reliant on its chemical synthesis processes. The performance of innovative drug transactions is strong, and there is huge potential for future development.

SadMoneyMeow

2026-03-31 10:36:50

Abstract generation in progress

The Russia-Ukraine war and the U.S.-Israel-Iran war have driven up energy prices and damaged factory facilities, severely impairing chemical production capacity across Europe and the Middle East, making China’s chemical industry the clear global winner. Notably, chemicals are also a must-have raw material for biopharmaceuticals. China already holds an absolute share in areas such as vitamins, amino acids, and high-purity solvents, with over 80% of antibiotic intermediate production capacity concentrated in China.

This dominant advantage in raw materials means that when Western and European pharmaceutical companies seek large-scale cost reductions, they must rely on China’s chemical synthesis processes, and after the war, their dependence on China will only intensify. This is where China’s CXO companies and innovative-drug companies’ advantages in global competition come from. From January to March this year, the total value of out-licensing transactions for innovative drugs exceeded $60 billion, approaching half of the total for 2025—this is just the prelude.

Related ETFs:

Science and Technology Innovation Medical ETF Huaxia (588130), tracking the Science and Technology Innovation Biomedicine Index (000683.SH), with medical devices (38.05%) + chemical pharmaceuticals (33.10%) + biologies (19.82%), and more than 90% of its weight focused on core segments of innovative drugs;

Biotech ETF (516500) tracks the CSI Biotech Thematic Index (930743), bringing together multiple CXO leading companies such as WuXi AppTec and Tigermed.

(Editor: Dong Pingping ）

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