Manufacturers of traditional Chinese medicine received a shot in the arm with a recent government edict that sets criteria for exports.
The Green Trade Standards of importing and exporting medicinal plants and preparations, which came into effect this month, is seen as an incentive for domestic pharmaceutical companies to boost their exports.
The standards call for mandatory labeling of contents, such as heavy metal and pesticide residue in herbal extracts and medicinal products.
The standards, the first of its kind in the country, were issued by the Ministry of Foreign Trade and Economic Cooperation.
"Western medicine makers have established standards for their products. But there is a huge difference in production technology between the West and Chinese medicines, and hence the lack of uniformity," said Liu Zhanglin, director of the China Chamber of Commerce of Medicines and Health Products, which deals in exports of Chinese medicine.
Given that there is a rising demand for ginseng, ginkgo and garlic in the United States and Europe, the potential for marketing home-grown organics abroad is huge. But the lack of a proper accredited criterion in traditional medicines was a block for entering the global market, Liu said.
The country has more than 800 companies involved in export and import of traditional Chinese medicines and annually exports US$500 million worth of medicinal materials, plant extract and traditional Chinese medicines.
The annual domestic sales are more than 70 billion yuan (US$8.45 billion), Liu said.
"Last year, (the company's) imports and exports of all kinds of medicines totaled US$112 million, out of which traditional Chinese medicines accounted for less than 1 percent," said Gu Ruoqing, an executive with Shanghai Pharmaceutical Imports & Exports Co. Ltd.
"Developed countries insist on documents like heavy metal content and pesticide residue in exported herbals, but there was no such requirement on domestic firms before. We lost many deals as a result," Gu said.
Unlike Western medicines that provide a clear indication of the molecular structure, it's difficult to analyze the specific content of traditional Chinese medicines. However, uniform quality standard from seeding to fertilization is the prerequisite in exports.
"With the new criteria, we will be in a better position to negotiate with foreign countries," said Liu. "So far, none of the Chinese companies have been able to get a market clearance abroad, partly because there was no uniform quality standard."
Domestic manufacturers have welcomed the new edict.
"With the required content indices, the quality is guaranteed, which will help in exports," said Xu Xiaoyang, an engineer with Tianjin Darentang Pharmaceutical Factory.
There are concerns, however.
"There are many differences among seeds, soil and processing methods; thus the curative effect varies," said Li Zhimeng, an engineer with Beijing Tongrentang Group. "If there is no control on the growth procedure, how can one guarantee the quality of products?"
"Also, the standards call for strict requirement on domestic manufacturers. More money is needed to maintain such high quality. It will be the smaller companies who will suffer," said Li.