Insight into the development of the medicinal biotechnology sector of China is provided through interviews of 19 Shanghai-based companies. Two commonly accepted strategy typologies are used to provide a predictive frame towards understanding their potential in the market. Most of the companies interviewed use the Miles & Snow Analyser Strategy. Two companies were clearly Prospectors, with founders of both discovering their technologies in laboratories of developed countries. The Porter Generic Strategy typology indicated that most are using Cost Leadership strategies. The strategic choice of these companies is problematic given the dynamics of the global market in which they could participate but are more sensible within the context of a protected market. For example, it appears that government-sponsored monopoly policies are driving low-cost strategies rather than innovation-based differentiation strategies.