GlaxoSmithKline (GSK), one world leading research-based pharmaceutical company, said yesterday that it will spend $40 million this year to start a research facility in Shanghai that will grow into one of its largest research centers globally.

The world's second-largest pharmaceutical company has begun to look for a research facility location in Shanghai and aims to recruit 50 to 100 top international scientists.

Its initial investment of $40 million in 2007 is projected to grow even larger in the coming years, as the company plans to have 1,000 scientists working at the facility in 10 years.

It is the latest trend for multinational pharmaceutical companies, which have begun to invest heavily in research and development in China. It is also the first multinational pharmaceutical company with plans to undertake an entire range of research in the nation. Others do only part of their research, such as drug discovery or clinical trials, in the country.

"China will not only be famous as the world's factory, but also attract (global attention) to its research and development for the pharmaceutical industry," said Amy Huang, president of GSK operations on the Chinese mainland and Hong Kong.

Swiss pharmaceutical giant Novartis announced last November that it will build its eighth global research center in China at an investment of $100 million.

Three months ago, US drugmaker Elli Lilly committed the same amount for research in the world's most populous market.

It also established a venture fund to invest in domestic drug developers, including a first investment of $10 million in a local firm.

"The most important factor is access to scientific talent," said Perry Nisen, senior vice-president of clinical pharmacology and discovery medicine with London-based GSK.

After studying India and South Korea, the pharmaceutical giant finally selected Shanghai due to its number and quality of universities and hospitals and the density of foreign drug makers in the city, as well as its attraction to overseas scientists.

It is estimated that more than 1 million Chinese went overseas to study in the past 28 years, with 275,000 who have returned to begin their careers in the world's fastest-growing economy.

The GSK center will be the only one for the company focusing on neurodegenerative disorders like Parkinson's disease, Alzheimer's disease and multiple sclerosis.