Export Analysis of Medicines and Health-care Products

The foreign trade of medicines and health-care products in China has increased rapidly in recent years. According to customs statistics, the total import and export value of medicines and health-care products in China was US$25.637 billion in 2005, an increase of 23.52% over 2004. The export value was US$13.802 billion, an increase of 28.14% and the import value was US$11.835 billion, an increase of 18.54%.

Both joys and worries

Chemical bulk medicines are still the pillar in export. The export value of chemical bulk medicines in China was US$7.903 billion in 2005, an increase of 27.55% over 2004 and accounting for 57.26% of the total export value of medicines and health-care products. Export destinations are mainly contributed by the European Union, the United States, India, Japan and Korea.    What should be noted is that the export of vitamin C met an anti-monopoly charge launched by the United States in 2005. It is the first charge lodged by American enterprises against Chinese enterprises according to their anti-monopoly act. Vitamin C has also become the first commodity in China that has met anti-monopoly charge launched by a foreign country. Besides, the antidumping threat from foreign countries is also quietly approaching. The capacity of vitamin C in the world is close to 130 thousand t/a and the capacity in China is as high as 102 thousand t/a. The consumption of vitamin C in the world is around 110 thousand tons a year. The capacity expansion conducted by domestic producers in recent years has resulted in an oversupply today. Paracetamol has always been a traditional advantageous product in China, but India has achieved a rapid development of the paracetamol production. India is using its advantage in registration and technology to make a quick access to the international high-end market. Paracetamol producers in China are faced with strong competition from India. Penicillin industrial salt in China is also faced with antidumping activities. India has launched dumping investigation into penicillin industrial salt from China. Once Chinese producers lose the lawsuit, the penicillin industrial salt sector in China would be seriously affected.    The export of biochemical medicines has increased rapidly. The export value of biochemical medicines in China was US$478 million in 2005, an increase of 50.81%.   The export situation of plant extracts is gratifying. The demand of plant medicines in the world has a further increase. China has rich resources, varieties and quantities of natural plants and plant medicines have a considerable development potential. The export value of plant extracts in China was US$293 million in 2005, an increase of 31.17% over 2004. Green tea extracts, artemisinin, aloe extracts and gingko leaf extracts have good sales and the average export prices of most products have increased.    The export of medical apparatuses has also increased rapidly. The export value of medical apparatuses in China was US$3.679 billion in 2005, an increase of 32.45% over 2004.    Medical dressings have strong competitive edge. The export value of medical dressings in China was US$534 million in 2005, an increase of 19.45% over 2004.

Greater difficulties for rapid growth

Making a further expansion to the export of chemical bulk medicines is an inevitable choice for the sector in 2006. China will maintain the advantage in traditional large-volume chemical bulk medicines. Antibiotics, vitamins, hormones, analgesic-antipyretics, amino acids and alkaloids will continue to hold a considerable share in the international market. Products in enterprises that have already got the FDA certification of the United States and the COS certification of the European Union such as terramycin, griseofulvin, gentamycin sulfate, avermectin and caffeine will also have a better performance in the market and their export prices will have an increase.   At the end of 2005, the Ministry of Commerce approved a group of cities with sound foundation of the pharmaceutical industry and strong competitive edge in the international market to establish national pharmaceutical bases. The important move will further optimize the distribution, promote the concentration and cultivate the regional competitive advantage of the pharmaceutical sector. National pharmaceutical bases will be taken as the lead to promote the export of pharmaceutical products in surrounding areas and even the whole country.   The State Pharmaceutical Supervision Bureau issued the "Provisions for the Control on the Processing of Medicines Entrusted by Overseas Pharmaceutical Companies" at the end of 2005. Opinions of enterprises and the pharmaceutical sector were solicited before the issuance of the document. The document has created a lenient policy environment for the export of chemical formulations in China and is therefore applauded by both enterprises and the pharmaceutical sector.   Some factors affecting the export growth such as the appreciation of Renminbi, the sustained drastic price rise of raw materials and the increasing friction in foreign trade should not be overlooked. These factors have increased the uncertainty in the export of medicines and health-care products in China. As the base number in 2005 was already quite high, it is more difficult to maintain a rapid growth in the foreign trade of medicines and health-care products in China in 2006. It is expected that the import and export of medicines and health-care products in China can hopefully both have a growth of over 15% in 2006 and the total import and export value will reach more than US$30.0 billion.