China's export of pharmaceuticals is expected to continue its fast growth this year, despite the impact of trade conflicts and a revaluation of China's RMB currency.

"Global demand for China's pharmaceuticals is strong," said Cui Bin, deputy secretary-general with the China Chamber of Commerce for Importers and Exporters of Medicines and Health Products.

It is predicted that the global pharmaceutical market will grow at an annual growth rate of about 5 per cent over the next few years.

"An increasing number of Chinese pharmaceutical companies, in particular privately-owned firms in coastal areas, are eyeing the international market," Cui said.

According to statistics from China's customs, 15,271 domestic companies were involved with medical exports last year.

"More multinational companies are also expected to enter the Chinese industry by merges or direct investment," he said.

In 2005, China's export of pharmaceutical products totalled US$13.8 billion, up 28.14 per cent from a year ago.

"This is the first time the growth rate surpassed the country's overall export growth," Cui said.

Chinese pharmaceuticals now reach over 214 countries and regions across the world.

But the country's exports are mainly focused on pharmaceutical ingredients, Cui added.

"The country also narrowed the trade deficit in medical equipment trade, reflecting the rapid growth of the domestic medical equipment industry," he said.

In a bid to boost China's medicine trade, the chamber of commerce is scheduled to hold an exhibition focusing on pharmaceutical ingredients in Shanghai in June.

The exhibition, known as CPhI China, will focus on exports.

"The annual CPhI plays an important role in promoting contact between Chinese pharmaceutical producers and foreign players, China's pharmaceutical trade and the domestic industry," Cui said.

However, he added that China's medicine have in recent years faced an increasing number of trade conflicts with major trade partners.

China's medicine trade has been used such trade disputes; saccharin was the first to encounter a dumping charge in the 1980s.

"Chinese pharmaceutical companies are seeing more anti-dumping or anti-subsidy cases," Cui said. "The conflicts are spreading to some major exports."

For instance, seven categories of pharmaceutical ingredients, with an annual export value of over US$100 million, face trade problems overseas.

Six Chinese vitamin C producers were accused by two US rivals of violating the US Anti-trust Law last year.

Penicillin salt is also facing dumping claims initiated by Indian companies.

Cui said the main cause was that some major trade partners, such as the European Union and the United States, had not yet recognized China as a full market economy.

It is difficult for China to win an anti-dumping suit without market economy status.

"Domestic companies are working to counteract the on-going dumping claims, " Cui said. "They understand that they might totally lose the target market if they do not respond."

However, he said, it is more important for them to promote the quality of their products.

(China Daily 04/12/2006 page10)

(For more biz stories, please visit Industry Updates)