A new regulation on traditional medicines, adopted by the European Union since April 30, has affected China's medicine exports to the region.

Statistics from Shanghai customs show the port exported less than US$190,000 worth of traditional Chinese medicine (TCM) in June, more than 30 percent lower than the same period of last year.

In May this year, the TCM export in Shanghai port totaled US$180,000, a year-on-year decrease of nearly 60 percent.

At the same month, TCM exports to Germany were only US$10,000, over 80 percent down compared with the same month in 2003. And there was almost no trade to France and Spain.

The European Union (EU) asked its member countries to adopt the Traditional Herbal Medicinal Products Directive by August 2005.

The directive regulates that manufacturers who export herbal medicines to the EU market must get the union's GMP (Good Manufacturing Product) certificate, product quality must comply with EU pharmacopoeia, and importers should have import licenses.

The transition period is from May 2004 to April 2011. During that period, traditional medicines currently on the market can be sold at the present distribution model.

"These regulations will impact on China's TCM exports to Europe in the near term," said Liu Zhanglin, director of the TCM department of the China Chamber of Commerce of Medicines & Health Products Importers & Exporters.

"But generally speaking, the directive, which for the first time grants TCM legal status as medicines, will benefit Chinese medicine makers to explore the European market in the future," Liu said.

Currently, most of the TCM products exported to the EU market are under the categories of food, native produce, health products, or pharmaceutical ingredients, instead of medicine.

Industry experts said that when one TCM product is registered as traditional herbal medicine in the EU, it indicates great market potential.

First, the market value of TCM will be greatly lifted compared to being sold as food or pharmaceutical ingredients.

Second, the legal status as medicine would allow TCM join EU countries' hospitalization insurance system.

And EU's recognition of TCM will help reduce possible unfair treatment of Chinese medicines by other countries.

"The effectiveness of the new directive provides a good opportunity for Chinese TCM makers to enter the EU market, but it also poses challenges for them," said Liu.

At present, the most important issue for domestic TCM producers is to find suitable import agents in the EU market and to get the union's GMP certificate, he said.

Due to the complexity of TCM, medicine makers could hardly provide a clear description as Western medicine makers usually do, which makes the registration more difficult, he said.

Meanwhile, domestic makers should strengthen research and development, dismiss some ingredients which are unacceptable to Western people, and develop products to cater for the huge European market.

Europe's herbal medicine trade is up to US$10 billion a year.

Compared with such a big market, China's TCM exports to the region are limited.

According to statistics from the chamber, China exported US$108.3 million worth of TCM products to the EU market, accounting for only 15 percent of China's total TCM export.

(China Daily August 7, 2004)