In the first half of the "15th Five-Year Plan" period, China's economy is witnessing the emergence of new growth drivers that are reinforcing its foundation. Starting August 3, the series "Opening New Forces" delves into the frontlines of various industries to explore these developments. This year, the list of "Made in China" exports has expanded to include many new names. While electric vehicles, lithium batteries, and solar cells were previously dubbed the "New Three" exports, the first half of 2024 has seen robotics, artificial intelligence, and innovative drugs rise as the "New New Three," representing future industries and becoming China's new trade calling cards.
Compared to the "Old Three" (clothing, furniture, home appliances) and the "New Three" (new energy vehicles, lithium batteries, solar cells), the "New New Three" represent a shift in trade dynamics. In the first half of 2024, China's foreign trade exceeded expectations, with total imports and exports surpassing 25 trillion yuan for the first time, securing its position as the world's largest trader of goods. The evolution from cost advantages to advanced manufacturing capabilities, and now to an integrated innovation ecosystem, is a key theme highlighted by experts like Chen Yutao, Deputy Director of the China Enterprise Confederation's Standards Committee.
Where to begin
The artificial intelligence (AI) industry is accelerating, with China exporting not only algorithms, computing power, and digital solutions but also seeing rapid growth in AI hardware exports. The global AI wave generates massive data flows between data centers, relying on optical communication networks made of fiber optics, optical modules, and components. At a fiber optics company in Wuhan's Optics Valley, production lines are operating at full capacity. Wen Xiaojiang, General Manager of the international division at Yangtze Optical Fibre and Cable Joint Stock Limited Company (Yanfibre), notes that "specialty fiber optics for AI data centers" are in high demand due to the explosion in data center usage.
This company's ability to meet surging global demand for computing power stems from years of technological preparation. Since China's first practical optical fiber was developed in Wuhan in the 1970s, Optics Valley has built a comprehensive industrial cluster covering materials, devices, and equipment. Today, over 800 AI companies are based here, with the photoelectric information industry's annual output value exceeding 660 billion yuan. The precision required for these small components, often controlled to micron levels, demands long-term process experience and sustained research investment. For AI computing scenarios, Yanfibre has developed a series of "artificial intelligence computing fibers," positioning China at the forefront of next-generation fiber technology and providing new options for global computing infrastructure. CEO Zheng Xin explains that the company "researched and developed this fiber without necessarily thinking it would be used for AI a decade later," but its advanced concept made it essential to reserve the technology. "When the AI wave came, this fiber was ready for those who were prepared." Chen Yutao adds that "China's solid foundation, built through national science and technology projects and industrial planning, has created opportunities for the current explosion of AI and new productivity."
Why just 10 ASX 200 shares?
The rise of the "New New Three" is supported by China's advanced manufacturing and industrial clusters. Chinese robotics, with its complete industrial ecosystem and scenario deployment capabilities, is leading the global intelligence wave. At a robot company in Beijing's Zhongguancun, the overseas business head holds a video call with a Thai distributor, adjusting solutions for various scenarios. Founded in 2014, this company leverages years of technical reserves and service capabilities to cover over 40,000 hotels, 200 medical institutions, and numerous factories, buildings, and retail outlets globally, exporting to more than 20 countries. Its modular architecture combines universal robot chassis with various functional components, allowing users to give voice or text commands via an AI assistant on their phones to dispatch robots for multiple tasks. In this company, robots are not just products but everyday "companions" for employees, moving between floors and workstations to respond to needs, refining their practical service capabilities. In the first half of 2024, China exported 12.947 million robotic units worth 24.85 billion yuan, reaching over 160 countries. Leveraging the world's most diverse application scenarios and complete supply chain advantages, Chinese companies are providing smarter, more cost-effective robots to global customers.
Innovation in pharmaceuticals
While AI and robotics export products and systemic service capabilities, innovative drugs in the "New New Three" focus on exporting patents and basic research capabilities. In the first half of 2024, 31 domestically developed innovative drugs were approved for market in China, two of which originated from the medical port in Hangzhou's Qiantang New District. This small 6-square-kilometer area has gathered over 300 innovative drug companies in the past decade. Beyond approved drugs, many are in clinical trials, with some receiving overseas revenue through drug patent licensing before market sales. Tianjing Biopharmaceutical Chairman Qian Lili explains that "ten years ago, products had to be approved abroad before being imported to China for redevelopment and listing. Now, we grant rights to overseas companies for our independently developed products. One product, a CD38 monoclonal antibody, has completed Phase 3 clinical trials in China, and we completed a BD transaction with US company Biogen this year, valued at $850 million with a $100 million upfront payment." BD, or business development, involves Chinese biopharmaceutical companies collaborating with global partners through licensing and joint development to bring new drugs to international markets. In the first half of 2024, the total value of Chinese innovative drug licensing transactions exceeded $100 billion, a new record, covering 10 treatment areas including oncology, metabolism, immunology, and neurology, making China the world's second-largest industry player.
In bioreactors, cells grow, divide, and secrete antibodies in culture media, which is a core raw material. Previously, this cost hundreds of millions of dollars annually, but now locally developed alternatives are a quarter of the price. Continuous improvements in raw material costs, process optimization, and basic research are accelerating the development and export of innovative drugs. Faster R&D and regulatory approval processes allow domestic drugs to reach patients sooner, expanding the "arsenal" for doctors. Shen Lin, Director of the Department of Digestive Oncology at Peking University Cancer Hospital, notes that "our confidence is growing. The speed of new drug development has clearly increased. Companies focus more on Chinese population needs, and we now prioritize meeting domestic demands before going global. With products, clinical needs, and policy support, multiple forces are driving innovation in this field." Liu Guoen, Dean of the Institute of Global Health and Development at Peking University, adds that "the explosive growth in China's innovative drugs is the inevitable result of decades of accumulation. Overseas markets are a necessary path for innovative companies. I expect that going global and internationalization will be the biggest highlights of our innovation journey in the foreseeable future."
During the research process, many people shared their "unexpected" surprises: the fiber optics company never anticipated the AI-driven demand surge; the robot company didn't expect so many global customization requests; and innovative drug practitioners were amazed that established overseas pharmaceutical companies have shifted from skepticism to actively seeking collaboration in just a decade. The reporter's main takeaway is that the "New New Three" are not just additional export items but represent a new systemic capability cultivated through decades of exploration. This change is not a minor adjustment to the export list but a fundamental upgrade of China's industrial logic for the "15th Five-Year Plan" period.
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