Recently, the Hang Seng Index Company released a research report on the Hang Seng Biotechnology Index, indicating that multiple factors are driving growth in China's pharmaceutical and biotechnology industries. From 2023 to 2030, the compound annual growth rate (CAGR) of China's oncology drug market is projected to reach 12.4%, compared to 8.4% in other regions worldwide. Among the 30 constituents of the Hang Seng Biotechnology Index, companies related to oncology drugs account for over 50% of the index's weight. In light of the rapid growth of the oncology drug market in China, the pharmaceutical industry is expected to benefit significantly. The Hang Seng Biotechnology Index (“HSBIO”), launched in December 2019, tracks the overall performance of the 30 largest biotechnology companies listed in Hong Kong. Currently, the 30 constituents are divided into four business subcategories: pharmaceuticals (39%), biotechnology (51%), pharmaceutical distribution (6%), and medical devices and supplies (4%). Year-to-date, as of October 17, 2025, the Hang Seng Biotechnology Index has surged by 83%, while the Hang Seng Composite Index has risen by 31% during the same period. According to data from the World Health Organization, healthcare spending in China still lags behind that in many G7 countries, with an expected annual GDP growth rate of 5.3% for disposable income (per Frost & Sullivan’s 2024 to 2028 forecast). In 2022, healthcare expenditure constituted 5.9% of China's GDP, significantly lower than that of other Western developed countries (around 10%). As China increases healthcare spending and narrows the gap with developed nations, the pharmaceutical and biotechnology sectors are likely to benefit from this trend. Additionally, the United Nations projects that the proportion of the population aged 60 and above will rise from 21% in 2024 to 42% in 2054. This aging population, combined with rising disposable income, is expected to boost healthcare spending, providing a larger market for companies producing such products or offering such services. Moreover, the increasing number of cancer cases in China is expanding the market size for drugs used to treat these cases, fueling growth in the pharmaceutical sector (CAGR of 12.4% from 2023 to 2030, compared to 7.5% from 2018 to 2023). On the other hand, the central government’s emphasis on innovative drugs, as opposed to generic drugs, is a key driver of growth in the biotechnology sector. Frost & Sullivan predicts that from 2023 to 2028, the projected CAGR for China's generic drug market will reach 3.8%, whereas the CAGR for the innovative drug market is expected to be 7.9%.