Foreign Medicine Wholesalers and Retailers to Enter China in 2003

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Last updated at: (Beijing Time) Monday, November 26, 2001

Foreign Medicine Wholesalers and Retailers to Enter China in 2003

China will open services of medicine sales and allow foreign wholesalers and retailers to enter the Chinese market starting from January 1, 2003. It is a solemn commitment made by the Chinese government to open the medicine market during the bilateral negotiations of the WTO entry and a major measure taken by the government in firmly adopting the opening policy as well.

Commitment to Be Honored

China will open services of medicine sales and allow foreign wholesalers and retailers to enter the Chinese market starting from January 1, 2003, said Yu Mingde, deputy director of Economic Operations Bureau of State Economic and Trade Commission at Sunday's Seminar of "Post-entry International Cooperation & Development of Beijing Medical Industry".

Seminar on Post-entry Cooperation Attractive

Representatives of nearly 30 transnational pharmaceutical companies and domestic famous medicine ventures attended the seminar.

It is a solemn commitment made by the Chinese government to open the medicine market during the bilateral negotiations of the WTO entry and a major measure taken by the government in firmly adopting the opening policy as well, Yu said.

Pilot Projects to Be Launched

He said that during the over one year before the overall opening of medicine sale services, China will launch pilot projects of foreign-funded enterprises. The projects will be under the management of State Economic and Trade Commission and Ministry of Foreign Trade and Economic Co-operation.

Conditions for the pilots mainly are:

First, approved by the authorities, foreign companies and enterprises can set up Chinese-foreign equity joint ventures and Chinese-foreign contractual joint ventures inside the country, dealing with medicine retail business.

Second, the annual average sales volume of the foreign companies or enterprises during the three years before they make the application for running retail business should exceed US$2 billion. The value of total assets in the year before their making the application should be over US$200 million.

Third, the Chinese side of the joint-operated projects should refer to the circulating enterprises which have relatively strong strength and operating ability. The value of total assets of the year before the application should be more than 50 million yuan (30 million yuan for enterprises in central and west China). The annual average sales volume of the three years before application should exceed 300 million yuan (200 million yuan in central and west China).

As for the enterprises dealing with foreign trade, G. the annual average volume of imports and exports run by themselves during the three years before application should be over US$50 million (volume of exports should be no less than US$30 million).

The proportion of shares of the Chinese side should be over 51 percent in the joint ventures dealing with wholesale business.

According to Customs statistics, during the first eight months of last year, China imported 15,000 tons of medicine, 42 percent more than the year before. These drugs were valued at US$530 million, 114 percent more. Up to the end of last year, China had issued nearly 2,000 import licenses, even though half of the foreign medicine on the market entered China illegally.

Meanwhile, many large foreign pharmaceutical firms advanced into the Chinese market by establishing joint ventures. The first joint venture to produce medicine appeared in 1980, and since then 1,790 joint ventures with contractual foreign investment of more than US$200 million have been founded, with actual investment reaching US$150 million.

By PD Online staff member Du Minghua

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