Demand for medicine holds promise

China's trade in medical products grew by 7 percent in 2016, and the segment drove overall trade as well, a key industry body said on Feb 10.

The China Chamber of Commerce for Import and Export of Medicines and Health Products says higher imports show robust demand in the domestic market, suggesting significant growth potential.

"The export and import of medicines and health products in China have stepped into a low-growth rate period, under declining overseas demand and fierce price competition," says Xu Ming, vice-president of the chamber.

"With an overall downward pressure on exports, the foreign trade in medicine and healthcare products has achieved relatively good performance."

Also, according to General Administration of Customs data, although China's exports of medicines and health products in 2016 fell 2 percent from the 2015 level to $55.4 billion (52 billion euros; 44 billion), imports were worth $48 billion, up nearly 4 percent, thus brightening the net trade figure.

But, the export of traditional Chinese medicine or TCM products saw an overall decline. The drop was due to the slide in exports of essential oil plant extracts. Besides, very few TCM products get registered in Europe, and hence cannot be sold there, the chamber says.

"It's critical for more TCM doctors to go abroad, and prescribe their products. Without prescriptions, TCM exports won't increase," Xu says.

On the other hand, China saw a significant increase in its export of preparations to developed markets such as Europe, the United States and Japan. In particular, exports of preparations to the US reached $295 million last year, up 40 percent year-on-year.

Last year, Chinese drug companies expanded overseas through mergers and acquisitions, and exported their products.

Gao Yue, a medicine analyst at Haitong Securities Ltd, says Chinese enterprises have to comprehensively and deeply understand the rules of medicine markets overseas to better organize their operations.

Two US students learn about traditional treatments at a Chinese medicine hospital in Liaocheng, Shandong province. Zhao Yuguo / For China Daily