For 2019, the English-Swedish multinational pharmaceutical and biopharmaceutical company AstraZeneca will raise $200 million to $300 million in funds to invest in health-care startups in China which also happens to be the drugmaker's second-largest market.

AstraZeneca PLC is the latest drug company to bet on the world's second-largest pharmaceuticals market.

AstraZeneca will join Johnson & Johnson and Novartis AG who have opened similar Shanghai-based centers in recent years.

The drugmaker's chief executive, Pascal Soriot, said that the fund, a joint venture between AstraZeneca and a Chinese investment bank, is getting attention from investors like Sequoia Capital.

AstraZeneca is targeting as much as $1 billion in funding over four years.

Mr. Soriot pointed out that AstraZeneca is building a new research center and a separate artificial intelligence lab, both in Shanghai, to make drugs for diseases that are more prevalent in China.

Mr. Soriot said that he thinks "every multinational I know" is looking at China.

US drugmaker Amgen Inc. last week announced it would pay $2.7 billion in cash for a 20% stake in the Beijing-based BeiGene Ltd.

For years, foreign drugmakers were not allowed to sell their most lucrative drugs in the mainland.

However, new policy measures have opened the door for foreign companies and China is approving nongeneric drugs at a record pace.

The drugs usually quickly approved are those for cancer treatment.

Likewise, Beijing is even slashing import duties and placing some drugs on a national reimbursement list.

Merck & Co., another pharmaceutical entity form the US, last week reported that its third-quarter China sales grew by 90%.

Still, Beijing has spent the past decade cultivating homegrown talents in this field.

It set up a state-run program that brought back many Western-trained Chinese scientists, the country poured billions of dollars into its technology parks dedicated to biotech startups and granted conditional approvals to promising local drugs.

Because of these, Chinese biotechs focusing on innovative products have flourished, attracting investors in the process at home and abroad.

The Shanghai-based consultancy ChinaBio said private-equity and venture-capital funds in 2018 put $17 billion into China's life sciences sector, a $1 billion increase from 2013.

Because of such amounts funding this sector, Chinese biotechs are nonstop in recruiting U.S. talents and setting up offices abroad.

In fact, the first innovative Chinese drug-a BeiGene cancer treatment-could get approved in the US as early as 2020.

Mr. Soriot pointed out that he wants AstraZeneca to be part of China's growth.

The life sciences fund-a first for AstraZeneca-will invest in traditional drug development to artificial intelligence in China.