TCM on verge of expansion, AI main driver

At a teaching clinic run by the Shanghai University of Traditional Chinese Medicine, acupuncture students are testing a new digital assistant designed to analyze needle techniques using artificial intelligence.

The application, known as AcuAssistant, uses motion-analysis software and sensor-based tracking to evaluate how practitioners lift, thrust and rotate acupuncture needles — techniques traditionally taught through observation and experience. Developers say the tool could help standardize training and generate data for clinical research.

The experiment offers a glimpse of a broader transformation underway in China's millennia-old traditional Chinese medicine sector, as policymakers and industry leaders seek to combine ancient medical theory with modern technology.

China hopes AI, stricter quality and regulatory standards and industrial policy support can turn TCM from a largely domestic healthcare practice into a modern pharmaceutical sector with stronger global reach.

Support for the industry featured prominently during the recent two sessions — the annual meetings of China's top legislature and political advisory body — where the government pledged to "advance the inheritance and innovation of TCM and strengthen the integration of Chinese and Western medical practices", according to the 2026 Government Work Report.

The modernization drive is also embedded in the outline of the 15th Five-Year Plan (2026-30) and a sector policy jointly released earlier this year by eight government departments, including the Ministry of Industry and Information Technology, the National Health Commission and the National Administration of Traditional Chinese Medicine.

The policy blueprint — the implementation plan for the high-quality development of the TCM industry from 2026 through 2030 — sets targets to upgrade the sector's industrial base and research capacity.

The authorities aim to build 60 high-standard herbal raw-material bases, establish five national innovation centers and create 20 smart manufacturing plants by 2030, according to the policy documents released by the ministries.

China's TCM industry accounts for more than one-quarter of the country's entire pharmaceutical industry, said He Yaqiong, head of the consumer products industry department at the MIIT.

To further boost industrial synergy, the MIIT is rolling out specific measures to secure high-quality herbal supplies, foster leading enterprises and develop blockbuster TCM products with annual sales exceeding 100 million yuan ($14.5 million).

China's TCM industry has generated more than 1 trillion yuan in annual revenue in recent years, government data show, making it one of the country's fastest-growing healthcare sectors.

Industry experts say the policy shift marks a move away from volume-driven expansion toward greater emphasis on scientific validation, manufacturing consistency and technological innovation.

"The industry is moving from rapid expansion toward innovation-driven development," said Liu Wei, an associate professor at the School of Management, Beijing University of Chinese Medicine.

"The transformation from traditional empirical knowledge to modern scientific verification is entering a critical stage," Liu said, adding that the long-standing gap between research institutes and pharmaceutical manufacturers remains a key barrier to turning lab breakthroughs into commercial drugs.

AI is emerging as one of the main tools in accelerating this transition. Researchers and companies are increasingly using large datasets — including classical medical texts, clinical records and pharmaceutical databases — to identify potential drug targets and analyze the complex interactions among herbal compounds.

"At present, AI can integrate classical TCM literature, clinical records and molecular research data to help uncover the mechanisms behind traditional prescriptions," said Geng Funeng, chairman of Good Doctor Group, a major enterprise with businesses across TCM research, production and trade.

"We are developing a vertical AI model for TCM, similar to Deep-Seek, to rapidly decode the material basis and working mechanisms of complex herbal formulas, which will significantly shorten the new drug research, and development cycle and clarify how traditional remedies work," Geng said.

Such tools could significantly shorten drug-development cycles and help answer fundamental scientific questions — whether a traditional formulation works, which compounds drive the effect and how the biological mechanism unfolds, Geng added.