Japanese pharmaceutical companies are investing more in China, the world’s second-largest market, aiming to tap the rapidly improving drug discovery capabilities of Chinese partners to find promising new candidates.

Astellas Pharma will open a research and development center – the company’s first in China – in Beijing as soon as this year.

The company already has sales and clinical trial facilities in Beijing and Shanghai, as well as a production base in Shenyang. The Beijing R&D hub will handle drug discovery.

Daiichi Sankyo is investing about 1.1 billion yuan ($162 million) to increase China production capacity by starting operations at a Shanghai pharmaceutical production facility in fiscal 2030.

Takeda Pharmaceutical and Eisai have partnered with Chinese biotech companies to expand their pools of drug candidates.