Import and Export of Bulk Pharmaceuticals in 2006

According to customs statistics, the total import and export
value of bulk pharmaceuticals (excluding chemical raw materials
and bulk pesticides) in China was US$10.346 billion in 2006. The
export value was US$7.482 billion - an increase of 22% over the
2005. The import value was US$2.864 billion - an increase of
5.59%. Bulk pharmaceuticals produced in China hold an
increasingly important position in the international market.

Staple bulk pharmaceuticals remain major export products

There are many categories of bulk pharmaceuticals. In terms of
application and structure of chemical compound, antibiotics,
organic acids, vitamins, amino acids and analgesic-antipyretics
are the five most important categories for export. The export
value of insulin products, amino acids, blood products, plant
extracts and alcohol pharmaceutical intermediates grew over 50%
in 2006.
   In addition to therapeutic pharmaceuticals, nutrition
additives, feed additives and food supplements have also become
focuses for exporters.

Exports of natural drug extracts are brisk

The exported amount and value of chemical bulk pharmaceutical
intermediates continued to outpace biochemical pharmaceutical
and natural drug extracts. It should be noted that natural drug
extracts surpassed the other categories in growth of export
value, expanding by 51.92%.
   The import value of chemical bulk pharmaceutical
intermediates was basically equal to that in 2005. The import
value of biochemical pharmaceuticals and natural drug extracts
grew 21% and 14.7%, respectively.

South America and Central America become trade regions with
rapid growth

Major regions trading bulk pharmaceuticals with China include
Asia, Europe and North America. The import and export value in
these three regions accounted for more than 90% of the total.
   Exports to South America and Central America saw the most
rapid growth in 2006, reaching 48.67% and 47.16% respectively.
There are mostly developing countries in these regions and the
threshold is lower than North America and Europe.
   China traded bulk pharmaceuticals with 183 countries and
regions in 2006. Major markets for export included North America,
Europe and Asia. Imports from Japan and the United States had
the highest value. Exports to the United States and India had
the highest value. The export value of bulk pharmaceuticals to
India grew 41.57%, and exports to the United States grew 9.24%.

Markets in developing countries are yet to be developed

Among China's foreign bulk pharmaceutical markets of over US$10
million, Israel, Columbia, Nigeria and the United Arab Emirates
grew over 50% in value.
   Nigeria is China's most important African market exported
bulk pharmaceuticals and exports to Nigeria grew nearly 90% in
value in 2006. Hong Kong is one of the important export channels,
but here the value dropped 32% in 2006. This shows that China's
export channels have diversified.
   Japan and Canada are major countries for the export of bulk
pharmaceuticals from China, but their export value of bulk
pharmaceutical intermediates dropped by 5% and 3% respectively
in 2006.

Export by producers themselves becomes the norm  
More than 5 000 organizations in China were engaged in the export
of bulk pharmaceuticals in 2006. More than 150 of those achieved
an export value of over US$10 million each. Exports of Zhejiang
Medicine Co., Ltd. reached US$150 million. Zhejiang NHU Company
Ltd., Anhui BBCA Biochemical Co., Ltd. and Shandong Xinhua
Pharmaceutical Co., Ltd. each exported around US$100 million.
   Most of the major export enterprises are producers exporting
staple bulk pharmaceuticals themselves. It shows that producers
have gained stronger export ability after the liberalization of
foreign trade. In the international trade of staple bulk
pharmaceuticals, in particular, producers have greater
advantages than trading companies. Producers have gained more
opportunities in the international trade and greater
initiatives in the expansion of export channels.   

Advantages are weakened   
Changes of industry structure and policies, both at home and
abroad, directly affect the development of the bulk
pharmaceutical sector in China today and also influence its
future development trend.
   The global industrial chain shift has led to a dramatic growth
in sales of staple bulk pharmaceuticals such as penicillin
series and analgesic-antipyretics to the international market
and even a supply deficit in the domestic market. A group of large
enterprises taking staple bulk pharmaceuticals as their major
products are beneficiaries. The extension of industrial chains
and the increase in value added downstream have become growth
points for future profits.
   Heightened competition in the domestic pharmaceutical sector
will surely force domestic enterprises to target the
international market and accelerate the process of
international certification.
   In past analyses of advantages of the pharmaceutical sector
in China, we often mentioned low cost and low environmental
protection requirements. With the increasing influence of
environmental protection efforts, the appreciation of RMB, the
growth of overhead expenses and the upgrading of employees'
qualifications in domestic enterprises, such advantages have
weakened. Only if the bulk pharmaceutical sector in China
enforces measures for environmental protection and improves its
ability to protect and apply intellectual property rights, can
domestic bulk pharmaceutical firms retain an overall advantage
in the global pharmaceutical business.