LONDON (Reuters) - Hutchison China MediTech has won Chinese approval for a closely watched new cancer drug in a significant boost for “made in China” medicine.

The London-listed company - which is known as Chi-Med and is collaborating with Eli Lilly on the drug - said on Wednesday that the National Medical Products Administration of China had approved Elunate or fruquintinib in colorectal cancer.

The medicine is the first China-discovered and developed mainstream cancer drug to win unconditional approval following a randomized clinical trial. Shares in Chi-Med rose more than 4 percent on the news.

The green light shows the country’s progress in speeding up drug approvals and underlines China’s emerging role in biotech, as Beijing tries to move the pharmaceutical sector up the value chain from its traditional position making cheap generic drugs.

Chi-Med Chief Executive Christian Hogg believes biotech will follow the same playbook as other high-tech areas like solar panels and bullet trains, where China is already a global force.

“China’s time is coming ... the biotech infrastructure that has been built in China is very strong and the pool of scientific talent is very deep,” he told Reuters.

“Fruquintinib represents the first one across the finish line, but we have other drug candidates in clinical trials and there are many other companies in China with drug innovations in development.”

Elunate will only be rolled out in the United States and Europe following its Chinese approval - a marked reversal from the historical pattern, which has seen patients in China getting new drugs years after their arrival in Western markets.

China is now the world’s second-biggest drug market, behind the United States, and is gaining in importance for global pharmaceuticals companies’ growth plans. In the case of Elunate, Eli Lilly’s sales force will market the product in China.

AstraZeneca and partner FibroGen also hope to score a China-first drug approval before the end of 2018 with their new anemia treatment roxadustat, which could win approval in China before it does so in the United States or Europe.

Enthusiasm for Chinese biotechnology stocks has led to a wave of new companies listing on Nasdaq and, more recently, in Hong Kong, amid investor excitement over the size of the Chinese market and recent moves to accelerate drug approvals.

But the market has been volatile and shares in the first company to take advantage of Hong Kong rules allowing listings from pre-profit biotechs dropped sharply in their first month of trading.

“There will be periods of overenthusiasm and under-enthusiasm, but the fundamental drivers are there and will remain,” Hogg said.