BEIJING – In the shadow of the Third Plenum – a gathering this week of China’s ruling Communist Party members who likely will deliver major government reforms – and the day after what’s billed as the world’s biggest e-commerce shopping spree known as Singles Day (during which Chinese consumers spent an estimated $5 billion), biopharmaceutical executives gathered at BIO’s Convention in China to sort through the challenges of this flummoxed industry.

Those challenges mirror the contrasting news du jour. The behemoth country’s biopharma conundrums are just as big.

On the one hand, some 700 attendees, mostly Chinese, heard sureties from BIO’s Jim Greenwood that China’s $70 billion pharmaceutical market is predicted to be number one by 2020 and that biologics account for 10 percent of a market that’s growing 30 percent each year. And CFDA Vice Minister Bian Zhenjia was over the top with these assertions: “We’ve gradually narrowed the gap. We’re now in a position to provide quality products,” and “by 2015 all categories of new drugs will be up to the new version of GMP standards.”

On the other hand, candid presenters such Sean Du, chief operating officer of Altravax Inc., of Fargo, N.C., (and previously with Nanjing, China-based Simcere Pharmaceutical Group), said “China is opening up with lots of opportunity, but there’s a lack of innovation and technology. It means there is opportunity for others to come in. Don’t be afraid to come to China and explore new partnerships.”

Having worked for both U.S. and Chinese companies, Du has a unique perspective.

“Not many people [in China] can understand true innovation.” Regardless, he said, “If you are serious about China you need to set up in China. Better yet, find someone who can understand the culture. It’s the number one requirement to start a scientific or business discussion.”

Hongguang Wang, director general of the China National Centre for Biotechnology Development (CNCBD), was brutally honest, saying that even though China’s production capacity is the largest in world, it’s not the highest quality. And he pointed to another intimidating truth about developing drugs here: “China’s drug approval process is slow because if something goes wrong with a new drug you go to prison.”

Despite that lead balloon, he encouraged attendees by pointing back to opportunities. “We’re lacking in research capabilities,” Wang said. “We’re lacking in latest technologies. We need to partner with multinational companies to exchange talent.”

Wang said he believes that biotech is the ultimate global driver of medicine in China, but he reminded attendees of an unsung potential hero: Traditional Chinese Medicine (TCM). “Western friends don’t believe in TCM. With implementation of Western methods of testing, we can make TCM go global.”

He’s right that Westerners are more than cautious about TCM, as the Chinese sometimes blur the lines between that ancient approach to medicine and biotech. Joseph Cho, managing director, R&D-based Pharmaceutical Association Committee, pointed out that proper R&D along with clinical trials are required to bring TCM into the 21st century.

The One Thing It’s Not Lacking

Throughout the day Tuesday, speakers enumerated the challenges faced by China’s biopharmas. Common themes reared over and again, ranging from ongoing problems with intellectual property protection in China and a regulatory system fraught with inconsistencies to the fact that policy and law are at odds: “We encourage scaling up via M&A, but there are restrictions in China,” Cho said.

But most agreed on one thing: “We don’t lack capital in China,” Cho said.

And then there is the oft-cited 12th Five-Year Plan and the $300-plus billion being devoted to develop science, technology and a million new jobs.

There’s no lack of interest on the part of big multinational pharmaceutical companies (MNCs) either. Several attendees from one big MNC chatted over lunch about why they were attending BIO China. It’s not because they want to hear about China’s ability to churn out the generics or active pharmaceutical ingredients.

“We want to learn about anything new,” one exec said, adding that his team is on the alert for innovation in China, despite the multitude of remarks throughout the day that China isn’t “there” yet. He predicted that in another decade, this country’s biopharmas will be innovating. Apparently it’s not too early to scout for those as-yet-unidentified innovators. The group of pharma company execs trekked off to a lineup of back-to-back partnering meetings, a big reason they come to the convention.

BIO China 2013 continues Wednesday.