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Price hikes for traditional medicine shock users in China

The prices of Chinese herbal medicine have gone up sharply across the board in China over recent months.

According to figures from the China Association of Traditional Chinese Medicine, 84 percent of 537 types of traditional medicine were the subject of a price hike in 2010. The selling price of 96 of them at least doubled.

Shen Jianhua, president of the Liwan District Hospital of Traditional Chinese Medicine, was quoted by the English newspaper China Daily that the average prescription at his hospital rose from 84 yuan (12.7 U.S. dollars) last year to 102.7 yuan in April.

"The big price rise will affect a lot of people who consult traditional Chinese medicine (TCM) doctors after they fall ill," said Wen Zhangbin, who had just taken his three-year-old grandson to see a TCM practitioner at a hospital in Guangzhou, capital of southern China's Guangdong Province.

TCM has a lot of followers in the city, because many people believe it is not only effective but cheaper than Western medicine, 63-year-old Wen said.

At a bazaar where herbal medicine is sold in Guangzhou's Qingping, a kilogram of taizishen now sells for more than 500 yuan but was less than 50 yuan at the beginning of 2010. Taizishen is mainly used in the treatment of children's cough and fever.

A trader surnamed Li at the Qingping bazaar said the serious drought that hit southwest China last year and the north China plain earlier this year meant less herbal medicine was produced.

Meanwhile, many herbal medicine growers have refused to plant herbs used in Chinese medicine because of the high cost of fertilizers and farm chemicals.

Xing Zhenjie, general manager of Bozhou Zhenjie Medicine Company based in Anhui Province, said part of the problem is the fact that the price of traditional medicine can be easily manipulated.

"Some medicines can only be planted in certain areas, so, if all products are bought by one investor or a group of them, speculating on those products is quite easy," he said.

Xing said people are buying up stocks so they can drive up the price.

"The shelf life of some products is 20 years, so many people, including planters, hoard medicine as a way of speculating and that drives up prices," said Xing. "There is no standardized shelf time for traditional Chinese medicine so people will not worry about an expiry date."

Jiang Yanghua, an analyst from China Investment Consulting, said it is necessary to establish a price and production monitoring mechanism to oversee the market. In addition, Jiang said a reserve mechanism would help ease the pressure when the price goes up even higher.