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Traditional Chinese medicine set for growth in output

By Ji Beibei (Global Times)

07:22, June 01, 2012

China expects to raise the total value of its output of traditional Chinese medicine to more than 550 billion yuan ($86.3 billion) by 2015, but industrial insiders said yesterday specific and supportive government measures would be needed to realize this target.

The traditional Chinese medicine industry is expected to grow at an annual rate of 12 percent on average from 2011-15, Shanghai Securities News reported yesterday, citing an unnamed source with the State Administration of Traditional Chinese Medicine (SATCM), China's traditional medicine watchdog.

The authority will encourage new forms of traditional Chinese medicines to be produced, support the development of plantation bases for rare and valuable wild herbs and help build leading businesses in the sector, said the report.

However, developing new traditional medicines has proved a significant challenge so far, Ming Jianhua with Shanghai Traditional Chinese Medicine Trade Association told the Global Times yesterday.

Ming said it usually takes 10 years to develop a new medicine, and even then there are risks of the market failing to accept it.

Producers of traditional medicine in China are mostly small companies, which have limited resources in research and development. They also tend to have overlapping businesses, and are unable to realize economies of scale.

Plantation bases for wild herbs have high requirements, both in finance and technology, and also represent a challenge for small businesses, especially if they lack financial support or tax breaks from local governments, Ming said.

There is also insufficient supply of herbs and an absence of uniform standards for herb evaluation, he said. "Some farmers tend to harvest herbs before their full growth in order to gain profits, diminishing the effect of the herbs and market recognition for traditional medicine."

The value of the industrial output of traditional Chinese medicine in 2011 reached 418 billion yuan, recording a year-on-year growth of 37.9 percent, according to the National Bureau of Statistics.

But problems in the sector remain.

"Unlike Western medicine, traditional Chinese medicine lacks systematic theories to clarify and prove its effects, making it hard for the sector to be industrialized. It also makes it hard to attract investors," Huang Kunyou, an expert with the organizing committee of the Chinese Medicine Development Forum, told the Global Times.

Nonetheless, Chinese firms are eager to expand into overseas markets. Exports of traditional Chinese medicine rose in 2011, with exports to the US jumping by 66.3 percent year-on-year.

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