Health & Beauty

Since the outbreak of the new crown pneumonia epidemic, factors that were originally relatively stable such as exchange rates and ocean freight have continued to change, and the complexity of overseas trade has increased sharply. Under the guidance of the policy of "stabilizing foreign trade, stabilizing foreign investment and promoting consumption", China's pharmaceutical industry has overcome difficulties, effectively responded to severe and complex environmental changes, and generally achieved stable development of import and export trade. In particular, the trade of traditional Chinese medicine products recovered quickly after the epidemic, even surpassing the growth rate before the epidemic, showing a new wave of growth.

According to customs statistics, in the first half of 2021, China's total trade in traditional Chinese medicine products was US$3.559 billion, a year-on-year increase of 16.3%. Among them, the export value was US$2.310 billion, a year-on-year increase of 7.4%; the import value was US$1.249 billion, a year-on-year increase of 37.4%.

Overview of the import and export of Chinese medicine products

High volume of plant extracts for export

Plant extracts have always been a large variety of Chinese medicine exports, and basically maintained a relatively high export growth rate. The variety of extracts involved is no longer a simple concept twenty years ago. The current plant extracts are more extensive and have applications in many fields such as medicines, dietary supplements, and food. The latest data for the first half of 2021 shows that China’s export volume of plant extracts reached 51,600 tons, an increase of 6.5% year-on-year; the total export volume was US$1.378 billion, an increase of 9.0% year-on-year.

Stevia leaf extract, eucalyptus oil, menthol, marigold extract, pepper extract, citrus young fruit extract, bilberry extract, rutin, ginkgo leaf extract, milk thistle extract and other varieties are still plants Hot varieties of extract exports account for more than 50% of extract exports.

The average export price of Chinese medicinal materials and decoction pieces has risen, and the export momentum is strong

The export of Chinese medicinal materials has maintained a relatively strong momentum since the rebound in 2020. The high market demand has driven prices up. In the first half of this year, the average export prices of most Chinese medicinal materials have risen to varying degrees. The latest data shows that the total export volume of Chinese medicinal materials and decoction pieces in the first half of this year was US$656 million, a year-on-year increase of 5.7%; the export volume reached 112,200 tons, a year-on-year decrease of 5.3%.

In the first half of the year, the top ten export varieties of Chinese medicinal materials and decoction pieces were cinnamon, wolfberry, red dates, ginseng, angelica, pinellia, astragalus, poria, dangshen, and yam. The export value of the top ten varieties accounted for 50% of the total export value of Chinese medicinal materials and decoction pieces, with a high degree of concentration. Cinnamon will continue to maintain a relatively high export growth rate on the basis of the overall heavy volume in 2020. The export value in the first half of the year was 150 million US dollars, an increase of 25% year-on-year, and it continued to maintain its position as the largest export variety of Chinese medicinal materials.

Exports of proprietary Chinese medicines continue to pick up

The proportion of Chinese patent medicines in the total export value of Chinese medicine products is not high, and the export proportion has been maintained at around 7% throughout the year, which is still in a weak position relative to raw materials. In the first half of 2021, the export value of Chinese patent medicines was US$142 million, a year-on-year increase of 10.3%; the export volume was more than 5,200 tons, a year-on-year decrease of 7.1%. In terms of single varieties, the top three export varieties of Chinese patent medicines are Pien Tze Huang, Angong Niuhuang Wan and Qingliangyou. The export value of Pien Tze Huang increased by 3.9% year-on-year, the export value of Angong Niuhuang Wan increased by 71.5% year-on-year, and the export value of cooling oil increased by 17.9% year-on-year.

Health food exports enter the adjustment period

At present, health foods are relatively special in the customs statistics system. The separately coded health foods are mainly fish oil, cod liver oil, royal jelly, bee pollen, lecithin, bird's nest, etc., of which vitamins and mineral preparation products are not included; in addition, Many health foods are exported in the form of food and are not included in the health food category. Therefore, the data related to health food trade in this article are incomplete statistics.

In the first half of 2021, the export value of health food was US$134 million, a year-on-year decrease of 2.7%. The export of honey series raw materials that enhance immunity has dropped significantly: the export value of fresh royal jelly powder decreased by 15.0%, the export value of fresh royal jelly decreased by 8.9%, and the export value of bee pollen decreased by 19.5%. The export volume of royal jelly preparations increased by 30%. On the whole, health food exports have entered an adjustment period.

Overall recovery in imports

In 2020, the import of Chinese medicine products slowed down due to the epidemic, and the annual import value fell by 4.7%. After the epidemic prevention and control became normal, overseas supply resumed. In the first half of 2021, the import value of Chinese medicine products reached 1.249 billion U.S. dollars, a year-on-year increase of 37.4%. From the perspective of subdivisions, the import value of plant extracts in the first half of 2021 reached 456 million US dollars, a year-on-year increase of 31.2%. Among the imported plant extracts, essential oil raw materials recovered significantly, with the import volume rising by 39.6% and the import volume by 45.6%. Among them, the contribution of menthol is huge, and its import value accounts for more than 30% of the total import value of plant extracts. In the first half of 2021, the import value is 148 million US dollars, an increase of 40.0% year-on-year.

China's imported medicinal materials are mainly domestic scarce and expensive varieties, such as American ginseng, frankincense, myrrh, dragon's blood, velvet antler, ginseng, licorice, Ghana seeds, turmeric, saffron, cumin, etc. In recent years, due to insufficient domestic medicinal resources, land and labor costs, and other reasons, many domestically produced varieties such as parsnip, turmeric, beidougen, and pansophyllum also need to be imported in large quantities to supplement domestic demand for medicines, such as horses in New Zealand. The import volume of antler has grown rapidly in the past two years. In the first half of 2021, the import value of medicinal materials and decoction pieces reached US$208 million, a year-on-year increase of 102.9%. In the same period last year, imports of varieties such as American ginseng, frankincense, and turmeric resumed their normal imports in the first half of this year, with an increase of 97.9%, 21.9% and 18.6% respectively. In the past two years, the imports of antler, saffron, cloves, etc. have maintained a high import growth rate in the first half of this year. The domestic market demand is strong, and the import volume has increased by 107.9%, 196.1% and 23.1% respectively. In the long run, there is still a lot of room for large quantities of imported medicinal materials.

In the first half of 2021, the import of Chinese patent medicines continued to decline, with an import value of US$133 million, a year-on-year decrease of 15.7%. But unlike last year, the import volume of Chinese patent medicines rebounded in the first half of this year to more than 8,200 tons, a year-on-year increase of 29.4%.

Under the guidance of the country's import expansion policy, the import performance of health food has been outstanding in the past three years. Imports in 2019 reached US$560 million, an increase of 24.8% year-on-year; imports in 2020 reached US$810 million, an increase of 43.7% year-on-year; imports in the first half of 2021 reached US$540 million, an increase of 106.4% year-on-year. Among them, bird's nest is still the most popular health food. Imports in the first half of 2021 reached US$280 million, a year-on-year increase of 51.0%.

A brief analysis of the export market of traditional Chinese medicine products

The United States is China's largest export market for Chinese medicine products. The Chinese medicine products exported to the United States are mainly plant extracts, accounting for more than 80%. The 2020 epidemic has caused the export of plant extracts to rise sharply, leading to a rebound in the overall export momentum of Chinese medicine, with an increase of more than double digits. In the first half of 2021, plant extracts exported to the United States reached 350 million U.S. dollars, an increase of 16.3% year-on-year. In the long run, the demand for plant extracts will not change, and the US's status as China's largest export market for Chinese medicine products will continue.

Japan is China's second largest export market for Chinese medicine products. Chinese medicinal materials, decoction pieces and plant extracts are the main export varieties. Most of these two types of products are used as raw materials for Japanese Kampo medicines. In the first half of 2021, plant extracts exported to Japan amounted to 120 million U.S. dollars, an increase of 13.0% year-on-year, and Chinese medicinal materials and decoction pieces exported to Japan amounted to more than 97 million U.S. dollars, a year-on-year decrease of 14.0%. Although the overall situation has improved compared with last year, in the long run, the export of Chinese medicine products to Japan has shown a slow downward trend.

As a relay station for the entrepot trade of Chinese medicine, Hong Kong has played an important role for a long time. With Hong Kong as a transit point, there are not a few Chinese patent medicines that are re-exported to other countries and regions. However, in recent years, the status of this relay model has been much lower than before.

In addition, the EU, as a good market for China's plant extract exports, still has broad prospects in the future. The ASEAN market has always been an important partner for the export of Chinese patent medicines and the import of medicinal materials. Coupled with the signing of the RCEP (Regional Comprehensive Economic Partnership) agreement, it is foreseeable that China's trade in Chinese medicine with ASEAN will become closer in the future.

The overseas development of Chinese medicine needs to be broken

Looking at the development of foreign trade of Chinese medicine products in recent years, overseas demand for Chinese medicine products has shown an increasing trend, and the total export volume has maintained a steady growth rate. However, the volume of overseas development of Chinese medicine is far out of proportion to the volume of the domestic Chinese medicine market. In 2020, the output value of China's traditional Chinese medicine industry reached 619.6 billion yuan. In the same year, the export of traditional Chinese medicine was only 26.2 billion yuan. The overseas trade of traditional Chinese medicine only accounted for 4.2% of the domestic traditional Chinese medicine industry output value. So, how to break the situation when Chinese medicine goes to sea?

Key word one: localization

The core concept of Chinese medicine "going out" is sharing. Traditional Chinese medicine should be fully integrated with the culture and local traditional medicine of the country and region where it is located. "Localization" is easier for local governments and people to understand, recognize and accept. Culture and industry can be localized, using local resources and local labor to achieve local production and local use.

One is to establish an overseas business model for Chinese medicine. The current sales model of proprietary Chinese medicine products relies more on overseas Chinese agents, and there is almost no initiative in market development. The development of traditional Chinese medicine in countries and regions along the “Belt and Road” cannot be limited to drug sales channels. The application scope of the product should be flexibly determined based on the target market and the characteristics of the product itself. Establishing overseas distribution channels is a long and arduous task, with large investment and slow output. However, as channels continue to improve, follow-up market feedback will increase exponentially. For Chinese companies that want to enter the market, they must first choose suitable partners and have sufficient patience to cultivate good relationships with partners; secondly, on the basis of applying for certification, they must especially maintain product quality and supply stability. , Otherwise it will be difficult to gain a lasting foothold in the market.

The second is to establish overseas bases (parks) for traditional Chinese medicine. Enterprises should be encouraged to establish overseas Chinese medicine production and processing bases or parks through acquisitions, mergers and reorganizations, and joint investment. Relying on overseas bases (parks), establish its own overseas circulation channels. Through overseas investment and industrial landing, companies can obtain support from the local government. By hiring local employees and adapting to the local culture and economic model, companies can more easily connect to existing mature market channels in overseas markets.

The third is to realize the global allocation of resources for the internationalization of Chinese medicine. In the current era of rapid development of global economic integration, the realization of global resource allocation is the general trend. For Chinese medicine, China contributes intellectual resources, such as traditional prescriptions and traditional Chinese medicine theories; raw materials are purchased from Southeast Asia or Africa; production bases can be located in Central and Eastern European countries, and they can be produced and sold globally in Europe to truly realize the global reallocation of Chinese medicine resources.

Keyword 2: Combination of service trade and goods trade

At the national level, if Chinese medicine wants to make great progress overseas, Chinese medicine and Chinese medicine need to "go global" together, promote each other, and develop in a coordinated manner. Traditional Chinese medicine needs the guidance of Chinese medicine in order to exert better curative effect. Service trade is combined with goods trade, and cultural output is coordinated with product output.

The state encourages the construction of overseas Chinese medicine centers. At present, China has established 50 Chinese medicine centers in Germany, Australia, the Czech Republic, Kyrgyzstan, Russia and other countries and regions to develop service trade. At present, the Ministry of Commerce and the State Administration of Traditional Chinese Medicine have selected 17 TCM service export bases. The follow-up work will continue to advance steadily. More TCM service export bases will be selected to promote trade in TCM services and goods. Sustainable development overseas.