Zheng Xiaoyu, director of the State Drug Administration, said the government will improve the market by attacking problems in circulation, distribution and sales.

"Illegal medicine trading markets should be banned," Zheng said.

Zheng said some people have opened drugstores to make big profits under the misunderstanding that such enterprises are part of the market economy.

Instead, drug production and trading should be approved by government departments because drugs can be dangerous if misused.

Illegal markets offer an easy avenue for fake or shoddy medicine to be sold.

To counter this trend, the government is encouraging established drug sellers to expand their businesses, he said. Last year, some well-performing drugstores were allowed to set up national chains.

About 300 drug chain companies now run 5,000 outlets nationwide.

Besides retail, the wholesale part of the drug market will be improved, Zheng said.

There are about 16,000 enterprises engaged in the drug wholesale business, but many use outdated practices and technology.

"The government plans to shut down one-quarter of the present wholesalers and refuse to approve their operations," Zhang added.

(China Daily 06/22/2001)