Cooperation and innovation go hand in hand to speed up the overseas development of Chinese medicine

Author | Flint Creation Cao Weihua

Traditional Chinese medicine has a long history, but it faces many doubts under the impact of modernization

In recent years, with the advancement of the reform of Chinese medicine and driven by market demand, Chinese medicine is gradually opening up the international market through the construction of a standardized system, the improvement of drug quality, and the integration of diversified business formats

01 Layout: System and Guarantee

The process of internationalization of Chinese medicine is also a process of modernization

In 2016, the State Council issued the "Outline of the Strategic Planning for the Development of Traditional Chinese Medicine (2016-2030)" (hereinafter referred to as the "Outline"), which proposed the direction of innovation and development of Chinese medicine: First, improve the collaborative innovation system of Chinese medicine and accelerate the formation of independent intellectual property rights , To promote the intellectual property, commercialization and industrialization of innovative achievements; the second is to strengthen the scientific research of traditional Chinese medicine, especially the "application of modern science and technology" and "the establishment of a theoretical framework system with clear concepts and reasonable structures"; the third is to improve traditional Chinese medicine Scientific research evaluation system, conduct research on clinical efficacy evaluation and transformation of traditional Chinese medicine, and establish a therapeutic efficacy evaluation system in line with the characteristics of traditional Chinese medicine

In 2017, the State Administration of Traditional Chinese Medicine and the National Development and Reform Commission issued the "One Belt, One Road" Development Plan for Traditional Chinese Medicine (2016-2020)" (hereinafter referred to as the "Plan"), which clarified the layout of Chinese medicine "going out" : Taking multilateral cooperation as the starting point, participating in the formulation of international rules, and building an international environment for Chinese medicine; taking innovation as the core, connecting with international standards, formulating medical standards and norms that meet the characteristics of Chinese medicine, optimizing Chinese medicine intellectual property services and strengthening intellectual property rights Protection; market-oriented, expand the service trade market of traditional Chinese medicine, and support the overseas deployment of enterprises

In terms of top-level design, the "Outline" and "Plan" have formed a relatively clear domestic development path and overseas layout of Chinese medicine.

From the forming process of the policy system, it is not difficult to see that the overall idea of ​​TCM innovation and development is: firstly establish a modern TCM management system, gradually explore the application of TCM in the modern medical system, and finally realize the integration of traditional TCM and modern medical methods.

02 Market: Demand and Innovation

Market demand is the core driving force for innovation and development

1.

In 2019, the export scale of traditional Chinese medicine reached US$4.

Figure 1: 2015-2019 exports of traditional Chinese medicine products

Source: China Chamber of Commerce for Import and Export of Medicines and Health Products, Customs Statistics

From the perspective of export commodity structure, plant extracts accounted for the highest proportion, mainly exported to the United States, used in the production of dietary supplements and food additives, and fluctuated under the influence of trade frictions; followed by Chinese herbal medicines and decoction pieces, and exported to major markets such as Japan and South Korea.

Figure 2: The structure of Chinese medicine exports in 2019 (US$100 million)

Source: China Chamber of Commerce for Import and Export of Medicines and Health Products

The proportion of Chinese patent medicine exports is low, and its difficulty in matching the clinical testing system of western medicine is the core factor.

Compared with Chinese patent medicines, the export of primary raw material products of the Chinese medicine resource industry encounters relatively fewer technical trade barriers, and therefore has become the main body of Chinese medicine products.

2.

In 2019, the scale of Chinese medicine imports was 2.

Figure 3: 2015-2019 imports of traditional Chinese medicine products

Source: China Chamber of Commerce for Import and Export of Medicines and Health Products, Customs Statistics

From the perspective of the structure of imported goods, plant extracts accounted for the highest proportion, mostly menthol and essential oils imported from Japan, Europe, Australia, etc.

Figure 4: Import structure of Chinese medicine products in 2019 (US$100 million)

Source: China Chamber of Commerce for Import and Export of Medicines and Health Products

It is worth mentioning that the popularity of "foreign Chinese medicines" is soaring.
In 2019, the import value of Chinese patent medicines was 390 million US dollars, which was higher than the export value of Chinese patent medicines (260 million US dollars).
Remarketing domestically, due to the well-controlled quality standards and good safety and effectiveness of clinical medications, they are generally welcomed by the domestic market
.
The development path of "foreign Chinese medicine" may alert the development of domestic industries and promote the accelerated formation of relevant regulatory systems
.

3.
Trend: structure and path optimization

In terms of structure, it shifted from the export of Chinese medicinal materials to the service trade of Chinese medicine
.
Market growth is still expected to be unstable.
On the one hand, due to the impact of the epidemic on the global supply chain, countries are forced to build production bases in China to cope with the risk of supply chain shortages.
Japan, India and other major exporting countries of Chinese medicinal materials have already On the other hand, the risk of global trade frictions has also exacerbated instability.
For example, the United States has already proposed a bill to limit the proportion of Chinese APIs in American medicines.
Such trade protection measures will also affect Chinese medicines.
The export of raw materials has an impact
.
Therefore, it is imperative to optimize the export structure of Chinese medicine.
At present, in terms of industrial policies and export policies, the consistent orientation is to reduce dependence on raw materials of Chinese medicinal materials, increase the proportion of Chinese patent medicines, health products, etc.
, and cooperate with overseas cooperation and exchanges of Chinese medicine.
The deepening of the development strategy has gradually formed a development strategy focusing on trade in traditional Chinese medicine services
.

In terms of paths, while maintaining the basic Asian market, expand the markets of countries along the Belt and Road
.
In terms of export value, the top 10 markets for Chinese medicinal materials exports from January to June 2020 are Japan, Vietnam, Hong Kong, Taiwan, South Korea, Malaysia, the United States, Singapore, Germany, and Thailand.
Asian countries and regions are still China.
The largest export market for medicines
.
However, the internal structure of the Asian market has changed.
Hong Kong’s status as a center of Chinese medicine re-export trade is declining, and the ASEAN countries’ markets are growing rapidly.
With the deepening of China-ASEAN trade cooperation, it is expected that the main markets for Chinese medicine exports will be from East Asian countries and regions.
The Lord gradually shifted to equal emphasis on East Asia and ASEAN
.
With the development of the "One Belt, One Road" exchange and cooperation of traditional Chinese medicine, the achievements will be gradually realized during the "14th Five-Year Plan" period, trade cooperation will be further deepened, and the export market share of traditional Chinese medicine in the countries along the route will increase significantly
.

03Breakthrough : Standardization, Openness and Cooperation

Under the dual promotion of policy and market, the development of modernization and internationalization of Chinese medicine will make breakthroughs in three aspects: standardization, openness, and cooperation
.

1.
Norm: Accelerate the establishment of a standardized system

Standardization is the basis for Chinese medicine products to enter the international market
.
Although the exploration of the international standardization of traditional Chinese medicine has begun in the 1950s, it was not until 2009 that the International Organization for Standardization/Technical Committee of Traditional Chinese Medicine (ISO/TC249) was formally established to start the construction of the international standard of Chinese medicine
.

According to data from the ISO official website, to date, ISO/TC249 has 23 participating members, including Singapore, Japan, South Korea, Thailand, Vietnam and other Asian countries and North American countries such as the United States and Canada, as well as Germany, Italy, Spain, and Switzerland.
In other European countries, it basically covers the major overseas markets of Chinese medicine; currently 68 standards have been issued and 32 standards are under development
.
In 2019, the ISO/TC249 secretariat was established at Shanghai University of Traditional Chinese Medicine
.
At the end of 2020, the Shanghai University of Traditional Chinese Medicine International Standardization Research Center project was launched, and international standardization has entered a period of accelerated development.
It is expected that the initial construction of the framework of the international standard system of Chinese medicine can be completed by 2030
.

2.
Open: build an international channel

Provide innovative channels and services with special economic function zones as the fulcrum.
Through the construction of international channels, the government, market entities and relevant scientific research institutions, universities, service organizations, etc.
will be promoted to build a "national Chinese medicine service export base", and focus on the international registration of Chinese medicine products.
With patent applications, international quality standards docking, international medical service quality certification, foreign Chinese medicine service trade information consultation and other services, it provides a smoother and more convenient channel for Chinese medicine companies to sail overseas
.
At present, 17 national Chinese medicine service export bases have been certified
.

In May 2021, the state introduced a series of measures to provide support in various aspects including providing TCM medical services to foreigners with special needs medical service management, providing financial support, building convenient channels for overseas patients, and incorporating international economic and trade cooperation mechanisms
.
At the same time, free trade zones and free trade ports are important platforms for opening-up and cooperation.
Their policy and system advantages also attract Chinese medicine service trade companies to land.
Through the development of innovative forms of integration of Chinese medicine, Chinese medicine can be integrated with tourism, health and wellness.
Integrating medical and aesthetics to provide special services for domestic and foreign markets
.

3.
Cooperation: speed up overseas settlement

In terms of policies, in order to promote foreign exchanges and cooperation of Chinese medicine, the "Plan" proposes to cooperate with countries along the route to build 30 overseas Chinese medicine centers, promulgate 20 international standards for Chinese medicine, register 100 Chinese medicine products, and build 50 Chinese medicine Demonstration base for foreign exchange and cooperation of medicine
.

Figure 5: 2015-2019 number of overseas Chinese medicine centers (units)

Source: "The Current Status and Enlightenment of Overseas Chinese Medicine Center Construction under the "One Belt and One Road" Initiative", Zhang Zijun, etc.

Judging from the actual construction situation, a total of 88 countries have been cooperated in 2019.
The number of overseas Chinese medicine centers has reached 49, and there are 59 demonstration bases for foreign exchange and cooperation of Chinese medicine.
From the perspective of project approval, the construction of overseas Chinese medicine centers The speed is still increasing, and it is expected that there will be a wider layout during the 14th Five-Year Plan period
.
In terms of international standards, as of the end of 2019, China has promoted the establishment of ISO/TC249 in ISO and has issued 45 international standards for Chinese medicine, and Chinese medicine is rapidly integrating into the international medical system
.

In terms of enterprises, there is also a trend of accelerating deployment in the international market
.
For example, Kunyao has entered the international market through its artemisinin series products, and has driven the panax notoginseng products into Africa and North America: In Africa, Kunyao has invested in Kenya, Tanzania, Nigeria and Uganda to establish subsidiaries to engage in artemisinin.
Sales of antimalarial drugs, chemical drugs and medical device products, and a medical center project in Uganda to carry out localized production of drugs or medical devices; in North America, Kunyao has successively invested in Rani, CPI, RiMO and other international innovative drug R&D platforms in the United States , And gradually realize the layout from product internationalization to industrial internationalization
.
In addition, channel cooperation may become a quick option for companies to enter overseas markets
.
Yiling Pharmaceutical and Shun Teng International cooperate with Shun Teng International’s channel advantages to sell products in Hong Kong, Macau and overseas, and promote them through e-commerce platforms.
In the future, they will jointly build a network of Chinese medicine clinics at home and abroad and Chinese medicine health products international Standard Center
.

04 Conclusion: Speed ​​up sailing

Under the dual promotion of policies and the market, cooperation and innovation will be the main theme of the internationalization of Chinese medicine in the next five to ten years.
Regional governments and related enterprises should pay attention to this strategic window of opportunity
.

For regional governments, the first priority is to accelerate the layout of the Chinese medicine industry.
Based on a correct understanding of the regional industrial environment and development advantages, select matching subdivisions, actively build an international platform for Chinese medicine, and expand overseas and regional Exchange and cooperation to accelerate the formation of a distinctive path; for companies, they should increase investment in product research and development, especially in connection with international standards, improve product quality and accelerate product innovation, and at the same time strengthen cooperation with international channels to seize the emerging world Market
.