The modernization of traditional Chinese medicine has become a prime concern as China aims to develop the sector as a lucrative global business, but underdeveloped herbal production has prevented the country from cashing in on the booming global demand for traditional Chinese medicine, analysts said.
China has witnessed a steady decrease in the export of processed medical products in the last few years, although raw materials have been exported and then made into medicine abroad.
“This is a gloomy picture. It indicates that China still only exports low-tech medical products,” said Fu Jingying, a senior expert with the China Society of Traditional Chinese Medicine.
The industry in China, its birthplace, has been expanding steadily, with an annual rate of 20 percent. Last year, around 50 billion yuan (US$6 billion) worth of traditional medical products were produced, 23 percent of China’s total medical production.
The growth comes on the back of brisk demand for ancient Chinese medical formulas and practices as foreigners become increasingly interested in the treatments.
But China’s share of the global market is only 2 percent. About 80 percent of the market are held by Japan and 10 percent by South Korea.
“Drug producers in China have been plagued by the inability to benefit from economies of scale, backward technology and financial problems,” said Fan Hongzhe, general manager of China Medicinal Materials Company, a leading Chinese player in this field.
This not only limits global exports, but puts China at risk of losing intellectual property rights to foreign companies.
Currently, nearly 40 kinds of traditional Chinese medical products have been patented in China by foreign companies, which use raw materials from China to produce advanced finished products and sell them back to China.
China’s WTO entry, which will commit the country to axe tariffs, will make sales and applications for patents easier for foreign firms.
“Modernizing the traditional Chinese medicine industry will be the key to the industry’s development,” said She Jing, deputy minister of health.
China recently completed an industrial shake-up by combining a number of companies in one industrial group to increase competitiveness.
The restructuring will continue in the next few years to cut down on repetitive production and to strengthen exports, officials said.
(China Daily 06/04/2001)
