China's next wave: Autonomous vehicles to new drugs

China is rapidly advancing in two frontier technologies—autonomous vehicles and new drug development—signalling another wave of global influence, according to a new report by The Economist.

The publication says these sectors are emerging as fresh examples of China's capacity to scale innovation, following its dominance in electric vehicles, solar panels and open-source artificial intelligence.

The Economist reports that China's robotaxi industry is expanding quickly, with autonomous vehicles produced at roughly a third of the cost of American rival Waymo's.

These vehicles have logged millions of kilometres and secured partnerships in Europe and the Middle East as part of efforts to reshape future transport and logistics.

In pharmaceuticals, China has shifted from being a producer of generics to becoming the world's second-largest developer of new drugs, including cancer treatments. Western companies are already licensing products from Chinese firms, and the magazine notes that a Chinese pharma giant now appears within reach.

The report highlights China's "deep pool of talent", extensive manufacturing base and the benefits of scale—factors that have pushed both sectors up the value chain.

Robotaxi development has benefited from the country's mass EV production and its dominance in sensors such as lidars, while the pharmaceutical sector has accelerated through large clinical trial networks and profits from generic drug production.

Regulation has also played a decisive role. The Economist notes that China's drug regulator quadrupled its staff between 2015 and 2018 and reduced the approval time for human trials from 501 days to 87.

Meanwhile, more than 50 cities have hosted pilot schemes for autonomous vehicles, encouraged by local authorities eager for investment and technological prestige.

However, the journal also points to intense domestic competition that forces companies into "brutal" price wars, leaving only the most resilient firms capable of competing globally.

Those survivors, it says, are now prepared to enter overseas markets, with low-cost medicines and robotaxi services expected to spread—though the latter may face restrictions in the United States due to security concerns.

The Economist warns that this new wave of Chinese innovation could challenge Western industries but argues that blanket protectionism would risk depriving consumers of cheaper medicines and transport.

Instead, it says Western governments should reassess their own innovation policies, noting that regulatory inertia, reduced research funding and limits on skilled immigration have left Europe and parts of the United States falling behind.

While China does not "own the future", the report concludes, countries hoping to compete in areas such as autonomous vehicles, pharmaceuticals, EVs, and solar power must learn from China's blend of private-sector inventiveness, regulatory flexibility and industrial scale.