China's Traditional Chinese Medicine Export Faces a New Market Environment

With the entry into force of the Hong Kong "Regulations on Chinese Medicine", the imminent transition period of the 7-year transitional period of the registration directive for the EU Traditional Drug Law and the sharp increase in domestic prices of Chinese herbal medicines this year, China's TCM exports are facing a new market environment -

Export of Chinese Herbal Medicine Enters Key Period - Interview with Liu Zhanglin, Vice President of China Chamber of Commerce for Import & Export of Medicines and Health Products

Reporter: The entry into force of the registration provisions of the "Chinese Medicine Ordinance" in Hong Kong has caused a great deal of concern despite the insignificant impact on mainland Chinese medicine exports. why?

Liu Zhanglin: At present, China has become a global leader in pharmaceutical manufacturing, and the export volume of pharmaceutical products is growing every year. However, it is unavoidable that the structure of China's export products is still unreasonable, with raw material exports as the mainstay. In the categories of Chinese medicine, the proportion of health products, plant extracts, Chinese herbal medicines and decoction pieces is relatively large, and the proportion of Chinese patent medicine exports is not high. The main battlefield for the export of proprietary Chinese medicines in countries in Southeast Asia and Hong Kong and Macao, Hong Kong is the bridgehead for the export of Chinese medicine. Therefore, changes in Hong Kong's Chinese medicine administration policy will be regarded as "touchstone" and "barometer."

Reporter: How do you see the Hong Kong "Traditional Chinese Medicine Ordinance" taking effect?

Liu Zhanglin: I think the Hong Kong Chinese Medicine Ordinance is suitable for the current regulatory requirements of Chinese medicine and is suitable for registration standards for Chinese medicine in the Mainland. It is normal for Hong Kong to automatically give up or withdraw from the market by raising the standards for the registration of Chinese medicines, rather than deliberately creating technical thresholds. For the mainland's excellent Chinese medicine companies, the purification of Hong Kong's pharmaceutical market will give them greater market space, which is a good news.

Reporter: The registration directive in the "EU Traditional Chinese Medicine Law" will take effect next year. Will the Chinese medicine export environment be even worse in the future?

Liu Zhanglin: It cannot be said to be bad. We should see that the global botanical drug market is growing at a rate of 10% every year, and the demand for the botanical drug market is constantly expanding. From the number of Chinese medicine exports in recent years, it can be seen that the annual export volume is increasing. However, at the same time, the international market has increasingly higher requirements for the quality of medicines, and the standards have become increasingly stringent. Under this circumstance, domestic Chinese medicine companies must declare to register and seize the opportunity if they want to apply for registration. If corporate managers decide to engage in the pharmaceutical industry for a long time, they must apply early and register early to improve their core competitiveness. China's pharmaceutical products will be exported sooner or later in the capacity of pharmaceuticals and cannot only stay in the position of a big supplier of raw materials.

In fact, whether it is the Hong Kong "Traditional Chinese Medicine Ordinance" or the "European Traditional Medicines Law", it is not a threshold for the establishment of traditional Chinese medicines; on the contrary, they all very much hope that Chinese medicines will enter in a legal capacity. The EU's simple approval procedure shows this point.

Reporter: Since the beginning of this year, the prices of Chinese herbal medicines have risen rapidly, and have no effect on the export of Chinese medicines? How many rational and irrational factors are there in price increase?

Liu Zhanglin: This year's price hikes in Chinese herbal medicines are indeed very powerful. From the point of view of exports, there has been a slight shrinking of long orders. However, the Chamber of Commerce predicts that due to the stable demand for Chinese medicine products from the international market over the years, Chinese herbal medicine exports will not shrink substantially due to rising prices. It should be noted that the rise in Chinese herbal medicines has its reasonable side. With the continuous reduction of medicinal natural resources and the increase in manpower and land costs, the increase in the prices of Chinese herbal medicines is an inevitable and long-term trend; on the other hand, Chinese herbal medicines have risen. There are also speculations about the existence of price, but any speculation will ultimately have strong support for demand. If there is no demand, speculation will eventually return to a reasonable price.

Reporter: Which type of products will be more advantageous for Chinese medicine exports in the future?

Liu Zhanglin: Due to the rising prices of Chinese herbal medicines and the appreciation of the renminbi, the export willingness of Chinese medicine export companies is very strong, but it is difficult for international buyers to accept price increases. In this case, the short-term export of domestic Chinese medicine companies will face certain difficulties, but the demand in the international market is rigid, so it will not affect the export of Chinese medicine in the long run. The opportunities for future export of formulated granules will increase, and we hope that companies will take the opportunity to follow suit.