There are more than 1,000 companies in China making traditional Chinese medicine, but large and medium-sized enterprises account for less than 20 percent of the total business players in the Chinese market.

However, May 20 saw the launch of the China Medicinal Materials Group, the nation's largest conglomerate of traditional Chinese medicine businesses. The move indicates a shake-up in the industrial landscape.

The group, formed by a number of leading Chinese manufacturers, distributors and innovators of traditional Chinese medicine, shows the country’s ambition to have an industrial giant competing on the world stage.

“The group will lead the way in R&D to advance China’s traditional Chinese medicine in the world market,” said Li Zhenji, deputy director of the State Administration on Traditional Chinese Medicine.

The changing scene follows warnings from industry experts that the nation has been pushed to the edge of the booming global business.

This has been caused by low efficiency due to poor management and a lack of insight related to market expansion.

It is also a result of too many companies scrambling into the same business with almost the same strategies, leading to a glut in production that reduces their capability for profit. A low high-tech content in the production of herbal medicine has also prevented China from competing effectively on the world stage.

The country was the birthplace of traditional Chinese medicine and has thousands of years of history but has been losing ground to Asian rivals such as Japan and South Korea.

Ren Dequan, deputy director of the State Drug Administration, said that China will iron out stiffer regulations this year to bring the industry up to global standards. The fact that its products are not up to these standards already is one of the key problems for Chinese drug firms trying to enter the global market.

The US and Europe have paid a lot of attention to imported medicine to make sure all products are up to global standards in terms of safety and quality.

China recently revised its law on drug administration, the latest but boldest effort ever to tighten the grip on medicine production and supervision.

The updated law strengthens supervision and keeps a closer eye on the whole process of manufacturing drugs as well as monitoring their quality, underscoring China’s bid to ensure production goes by global rules.

And the government is strengthening its financial support of technological innovation in the traditional Chinese medicine sector. This has become one of the key issues on the agenda for China’s high-tech innovation plan over the next five years.

Cash will be ploughed into planting the raw materials needed for traditional Chinese medicine, upgrading facilities to produce them, officials said.

(China Daily 05/21/2001)