(Yicai Global) Aug. 16 -- The Chinese government's five-year development plan for China's traditional medicine sector, will make it a pillar industry vital to the national economy for the first time.
As of 2020, revenue at major traditional Chinese medicine companies is expected to exceed CNY1.5 trillion (USD227 million), with an average growth rate of 15 percent over the next five years, according to a government report.
Traditional Chinese medicines and traditional medicine-related healthcare products will see development opportunities in the number and quality of clinics and professional expertise, as a number of pharmaceutical analysts and investors told Yicai Global.
Going forward, investment in traditional herbal medicines, materials and clinics is set to attract investor attention, Mr. Wang Shuguang, investment business partner at medical investment institution GTJA Investment Group, told Yicai Global. Mr. Wang has been closely watching a number of traditional Chinese medicine-related investment targets since the start of this year.
Mr. Sun Chao, pharmaceutical industry partner at PwC's consulting team Strategy&, believes that well-known brand names among traditional Chinese medicine firms are poised to ramp up investment in innovations in the combination, formulation and production techniques of products, and the market of traditional Chinese medicine-related healthcare products is also expected to grow.
In terms of traditional medical services, a key point of the latest government plan is that it incorporates them into the national tiered medical treatment plan, Mr. Wang said.
However, the biggest development bottleneck facing traditional medicine clinic projects is the ability to quickly replicate projects. Unlike western medicine, good traditional Chinese medicine doctors are trained by veteran doctors of the discipline, making it difficult to develop chain projects or to copy projects on a large scale, Mr. Wang added.