China's medical industry is expected to play a bigger role globally in innovation with increasing applications of cutting-edge technologies like artificial intelligence and automation, especially when the sector has become hot for investment amid the COVID-19 pandemic, said renowned Chinese investor Kai-Fu Lee.

"Life science and other medical sectors, which used to take the long term to grow, have been accelerated in their development amid the pandemic. With the help of AI and automation, they are reshaped and upgraded to be more intelligent and digitalized," said Lee, who is also chairman and CEO of venture capital firm Sinovation Ventures.

Lee described the change as an era of medical plus X, which mainly refers to the increasing integration of forefront tech into the medical industry, for instance, in sectors including auxiliary drug development, precise diagnosis, individualized treatment and surgical robots.

He said that the industry is getting extremely hot for investment due to the pandemic, but is now squeezing out bubbles to enter a more rational period. A bubble occurs when companies are overvalued by investors.

"China will likely enjoy a leap in such an era and lead global innovations in life science for the next two decades, mainly thanks to the country's excellent talent pool, opportunities from big data and a unified domestic market, as well as the government's great efforts in driving new technologies," he said.

The remarks came as the medical and healthcare sector continues to rank among the top three most popular industries for investment, and also ranks first in the number of companies that successfully exit after an initial public offering in the first quarter of this year, according to Zero2IPO Research, a financial services data provider.

"It showed that the medical and healthcare sector has become one of the few spotlights for investors this year and has investment value in the long term," said Wu Kai, partner of Sinovation Ventures.

According to Wu, the industry is no longer limited to traditional vertical sectors such as biomedicine, medical devices and services, and is embracing the integration of more technological breakthroughs.

Taking vaccine research and development as an example, it took 20 months for the SARS (severe acute respiratory syndrome) vaccine to enter clinical trials after the discovery of the virus in 2003, while it took only 65 days for the COVID-19 vaccine to enter clinical trials.

"For investors, sustained efforts should be given to such medical technology innovations to drive their breakthroughs and contributions to the whole sector," he added.

Alex Zhavoronkov, founder and CEO of Insilico Medicine, a startup that uses AI to develop new drugs, agreed. Zhavoronkov said that it is not a question of whether China will become a powerhouse in AI-driven drug development.

"The only question left is 'when that will happen?'. China indeed has a complete support system for startups and big-name pharmaceutical companies to make good use of AI technology to develop new drugs," he said.