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Pharmaceutical Industry Opened Wider to Foreign Investors
China's pharmaceutical industry is being increasingly opened up to foreign investors in an effort to expand the sector more quickly and compete more effectively with the rest of the world when the country enters the World Trade Organization.
Technological innovation is at the top of the agenda, as is the improvement of traditional Chinese medicine.
The State Economic and Trade Commission (SETC), which oversees the country's pharmaceutical trade, said it is conducting a pilot scheme to divert foreign capital into domestic pharmaceutical firms.
Yu Mingde, director of the commission's Pharmaceutical Department, said at least five Chinese pharmaceutical companies have signed contracts or "letters of intent'' to use foreign funds to set up Sino-overseas joint pharmaceutical retail chains, according to the SETC sources.
At the moment, the China Associated Guangshen Pharmaceutical Co in Shenzhen is co-operating with US Wal-Mart in pharmaceutical retailing in China. Talks on similar co-operation with foreign companies are also under way for Shenzhen Medicine Production and Supply Co and Shanghai Pharmaceutical Co Ltd, according to Wang Jingli of the SETC.
China has welcomed more investment in new technology, equipment and medicines including new types of anti-cancer medicines and medicines for the brain. There has also been more money ploughed into new contraceptives.
During WTO negotiations, China promised that it would open up the pharmaceutical distribution and medical treatment services, and relinquish control on the importing of large-scale medical equipment, Yu told a meeting about the performance of the country's pharmaceutical industry.
China has more than 6,000 pharmaceutical producers - 1,000 of them are losing money - and more than 16,000 medicine wholesale firms. These numbers will be dramatically cut in the next five years, when China will have 45 to 50 large-scale medicine distribution groups or companies whose combined sales will account for 70 per cent of the sector's total.
Yu said the SETC is considering treating domestic pharmaceutical firms the same as foreign companies in line with WTO principles.
Electronic commerce will also be introduced to the pharmaceutical sector, he said.
Modern technology should be used to modernize traditional Chinese medicine (TCM) and improve its quality and technical standards, so that it can reach out further into the European and American markets, Yu said.
Another development priority listed in China's 10th Five-Year Plan period (2001-2005) -- biomedicine -- also calls for technical innovation, said the official.
Biomedicine is medicine deriving from living natural sources.
China has 140 enterprises engaged in developing biomedicine. In 1999, 92 new types emerged in the world market, of which China produced 20, or 21.74 per cent of the total, according to SETC statistics.
(China Daily)
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