a.To encourage innovations.
b. To discourage repeat constructions and abandon out-of-date products, techniques and equipment.
a) To reinforce macro-regulations and prohibit low-standard repeat constructions.
b) To encourage enterprises to carry out the consigning processing and further simplify relevant approval procedures.
c) The examination and approval of "mimic" medicine should take market demand, supply and technological standards into consideration, and should be helpful in the structural adjustments of the medical economy. To intensify administration and supervison on the hospital pharmaceutical work.
d) To publish the results of cleared up and revoked products according to the Medicine Regulation Law to produce a convenient situation for capable enterprises to arrange their production and marketing to satisfy demand.
e) To integrate economic, legal and essential administrative means to shut down enterprises that produce or sell illegal or unapproved medicines, pollution, have no chance of making a profit, or ones that do not satisfy the general manufacturing practice (GMP) to create a favorable market system and environment.

7). To create an impartial market environment

a. To clear up and amend files and regulations not favorable to industrial development, and create an impartial environment for enterprise development.
b. To put GMP into practice using appropriate steps and plans. GMP is the guideline for implementing comprehensive quality management in the manufacturing industry. Policy support, such as interest allowance and tax exemption over a certain period for technological improvements of GMP, should be embodied by related policies.
c. To keep up with medicinal circulation system reforms and to amend existing policies and regulations that restrict enterprise reform and development. To promote GSP (good supplying practices) enthusiastically and crack down on the production and sale of illegal medicines.
d. To reinforce the regulation of importing medicine and carrying out GMP over imports.
e. To set up and improve the medical insurance system in a complete, commercialized manner.

2. The development of the medicine industry

A relatively self-contained industrial system and circulation network have come into being, and China has become one of the main medicine-manufacturing nations of the world. There are 3,613 enterprises producing almost 1,500 kinds of chemical medicines with a total production of 430,000 tons, ranking second in the world.

Chinese enterprises are capable of producing 34 types of chemical pharmaceuticals in about 4,000 varieties. In 2000, the output of troche, liquid and powder acupuncture therapy capsules and transfusions reached 277.8 billion, 26.4 billion, 9.3 billion, 48.6 billion and 2.3 billion units.

Chinese traditional medicine has achieved scientific and standard production with the capability to produce some 40 varieties of modern pharmaceuticals, including injections, and production has reached 370,000 tons, with an approximate 8,000 varieties.

From 1978 to 2000, the annual growth rate of the medicine industry was 16.6 percent, becoming one of the fastest-growing industries of the national economy. The production value in 2000 was 233.2 billion yuan, with an annual growth rate of 17.5 percent -- exceeding the the 15-percent target of the Tenthth Five-Year Plan. The industrial net increase was 57.8 billion yuan with an annual growth rate of 15.5 percent. The commercial sale of medicine totaled 150.9 billion yuan -- up 70.5 billion yuan at an annual growth rate of 13.4 percent.

The sum of exports and imports was US$6.4 billion, including US$3.8 billion in exports, up US$0.8 billion over 1995 at a growth rate of 4.8 percent; an externally oriented medicine economy has also come into being gradually. The total tax collected in the medicine industry was 27 billion yuan, up 15.5 billion yuan over 1995 at an average annual growth rate of 18.6 percent; total profits were 14.38 billion yuan, up 9.43 billion yuan over 1995 at an average annual growth rate of 24.5 percent. Both figures exceed the 18-percent target of the Ninth Five-Year Plan. The commerce of medicine realized a profit of 0.76 billion yuan, up 0.4 billion yuan over 1995 at an average annual growth rate of 16.1 yuan. The whole industry entered a phase where the growth of benefits surpassed that of the gross increase and the trend of increases also began to transform.

In 1999, total profits in the medicine industry ranked seventh among the 37 national industries. As a fast-growing industry of the nation's economy, the medicine industry's status will improve further.
In 2002, total assets in the medicine industry amounted to 361.456 billion yuan, up 12.67 percent over the previous year. Sales revenue totaled 222.053 billion yuan, up 16.27 percent over the previous year. Profit reached 20.106 billion, up 163.27 percent over the previous year. Employed workers numbered 1.0418 million, up 1.58 percent over the previous year.

During January-May, 2003, total assets in the medicine industry amounted to 392.718 billion yuan, up 15.47 percent over the same period in 2002. Sales revenue totaled 106.646 billion yuan, up 22.03 percent over the same period of the previous year. Profits reached 10.05 billion yuan, up 70.74 percent over the same period of the previous year. Employed workers totaled 1.1131 million, up 3.83 percent over the same period of the previous year.

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