AstraZeneca, the UK's No 2 drug maker, is to build a giant cancer research centre in China and has promised to invest $100m (￡54m) in research and development there over the next three years.

The move is one of the boldest by a Western pharmaceuticals company in China, forecast to become one of the five biggest markets for medicines by 2010.

David Brennan, who took over as chief executive of AstraZeneca from Sir Tom McKillop at the start of this year, has promised significant investments in emerging markets to counter fears that drug prices will come under downward pressure in the West.

The research centre will also capitalise on China's growing strength in academic science, Mr Brennan said in Beijing yesterday. The company is evaluating potential locations based on their access to academic institutions. "China is transforming itself at an unprecedented rate," Mr Brennan said. "It is an extremely large pharmaceutical market that is growing very rapidly." He said while the value of global drug sales is growing 7 per cent annually, China's spending is expanding at a rate of more than 20 per cent.

Drug sales in China could almost double to $25bn (￡13.5bn) a year from $13bn in 2005, as the Chinese increasingly accept Western medicines, analysts say. Big Pharma has been encouraged to invest since the Beijing government made more conciliatory noises on the protection of Western intellectual property, although the industry still believes more should be done to tackle counterfeit medicines in the country.

AstraZeneca began emphasising emerging markets two years ago, and has opened a manufacturing plant in Wuxi in Jiangsu province, and set up a network of marketing and sales offices in China. It employs 2,200 people in the country.

The company also increasingly conducts clinical trials of new drugs in China - a fact that could become important as scientists learn more about racial differences in response to medicines. Two years ago AstraZeneca found that its novel lung cancer drug Iressa did not work on patients in the West but appeared to be of benefit to Asian patients.