It is widely regarded that the pharmaceutical sector is quite different from other manufactures for its character in inno-vation activities. This paper analyzed the nature of innovation activities by multinational companies (MNCs), which stand for foreign capital, focusing on two parameters named: size and scope of innovation through investigating patent data from 1985 to 2005. The paper reveals the role of the foreign capital and identifies their technology stratagem by developing a tool named Double- S Matrix. Research finding indicates that foreign capitals play an important role on overall national innovative competitiveness in this sector. Implications from this research can be used as reference to policy makers and business companies in China.
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