China is reshuffling its biotechnology management system and working on a long-term plan to fuel development of the sector, but industry experts say more private involvement is needed if China wants to become a true biotech giant.

The key question for the industry's development is not whether the government has increased public investment, but whether the biotech industry has developed independent and efficient research and development capabilities, said Fang Xingwang, a senior scientist of Austin-based Ambion Inc.

Fang is a former professor of biological chemistry at Peking University.

Xu Guanghua, minister of science and technology, announced last Monday that the State Council, China's cabinet, has decided to form a top-level leadership committee for national biotech development which will be headed by a major State Council leader.

Xu spoke to the 10th International Symposium of the Society of Chinese Bioscientists in America (SCBA), which was held between last Monday and Friday in Beijing.

Xu said other major measures to boost the biotech sector in China include forming a national industrial association, working out a national development plan outlining the focus and direction of China's biotech sector in the next two decades, as well as working out a biosafety law.

The minister did not give a timetable on when to form the leadership committee or to release the biotech development plan.

"The move shows that the top leadership looks at the biotech sector as a kernel area of the national scientific and economic development," Xu said.

Insiders said the committee will be chaired by Chen Zhili, who was promoted to State Councilor from the minister of education in 2003.

In China, leadership committees are very powerful and created only in very crucial sectors.

The established ones include Central Leadership Committee of Economic Work, Central Leadership Committee of Laws and Central Leadership Committee of Taiwan Affairs.

Top committee, US$1.2 billion budget in plan

Leadership commissions are also formed under special circumstances such as the SARS (severe acute respiratory syndrome) outbreak.

"We will continue to increase our investments into basic research, developing research bases and teams, and enhancing national data-sharing mechanism in biotech and life science sectors," Xu said.

Since 2001, China has tremendously increased the amount of public funds allocated to biotechnology.

The national biotechnology budget in its 10th five-year period (2001-2005) increased 400 per cent from the previous five-year period to reach 10 billion yuan (US$1.2 billion), said Li Yong, vice-minister of science and technology, in a previous speech.

Despite the growth in public investment in biotech research, China's biotechnological development is still challenged by lack of collaboration between different departments, poor corporate support for new biodrug research, as well as lack of intellectual property rights, said Zhang Hongxiang, editor-in-chief of the Journal of Chinese Biotechnology.

The public budget for the biotech sector is distributed by the Ministry of Science and Technology (MOST), the Ministry of Health, as well as universities headed by the Ministry of Education, which may cause red tape and waste resources, Zhang said.

Sun Qihong, a scientist with the Chinese Academy of Military Medical Sciences, said the lack of co-ordination between different government departments has delayed their work to launch the International Human Liver Proteome Project (HLPP).

HLPP is the first basic international biotech program chaired by Chinese scientists. Sun is the assistant to the HLPP chair.

"Our plan and budget of about 200 million yuan (US$24.15 million) have long been endorsed by MOST, but when the budget went to the National Development and Reform Commission (NDRC) for approval, it was stranded for nearly one year because NDRC has to balance the interest of different ministries involved in the program," Sun said.

Zhou Yongchun, a senior policy researcher with the Chinese Center for Science and Technology Promotion, a MOST think tank, said that the emerging competition from countries like India is another element pushing the Chinese leadership to pay more importance to biotechnology.

In 2000, India established its Department of Biotechnology, the world's only ministry-level administrative organ. Early this month, Indian biotech industry officials said the biotech industry in the country will generate 1 million jobs and investment of US$10 billion by 2010.

Last year, a group of leading overseas Chinese bioscientists wrote a letter to Premier Wen Jiabao calling for China to establish an organ like the US National Institute of Health to steer public investment in the biopharmaceutical field.

"We should not be left laggard behind India this time as we were in information technology last century," Zhou said.

Despite China's ambitious plan to fuel the biotech sector, there are still many institutional barriers in the field, experts say.

Whether the establishment of the leadership committee can bring tremendous growth of investment into biotech sector remains a question, Zhang said.

Even if the investment is greatly increased, it has to be used more efficiently, Fang of Ambion, said.

"Every biological laboratory in Chinese universities wants to introduce a full range of equipment, leading to wasted resources and tight budgets of individual institutes. Due to a lack of full market competition, biological laboratories have not learnt to optimize their resources," Fang said.

It is also far from enough for the Chinese biotech sector to merely rely on government funding, Fang added.

There are more than 200 firms in China involved in the biopharmaceutical industry, but most of them produce generic biodrugs, such as human interferon or insulin, and they would not invest heavily in developing new drugs with independent patents. China's biopharmaceutical industry only holds three independent drug patents.

"They would not spend a single yuan on compounds possibly leading to new drugs. The only kind of compounds Chinese biopharmaceutical firms would invest in is those approved by the US Food and Drug Administration to launch clinical trials," said Wang Tao, a researcher with Bristol-Myers Squibb Pharmaceutical Research Institute.

(China Daily July 26, 2004)