| China has established a pharmaceutical industry | | | | the vast consumer demand for pharmaceuticals, the |
| structure, and has become one of the largest | | | | lower labor costs and the changes resulting from |
| pharmaceutical producers in the world. The Chinese | | | | economic reform. Changes to the patenting laws in full |
| pharmaceutical industries have increased in value with | | | | compliance with the requirement of the Agreement on |
| an annual average growth rate of 16.72% over the last | | | | Trade-Related Aspects of Intellectual Property Rights |
| few decades. However, the industry is still small-scale, | | | | (or "TRIPS Agreement") and the lack of Chinese |
| with a scattered geographical layout, duplicated | | | | pharmaceutical R&D have also left gaps in the |
| production processes, and outdated manufacturing | | | | market. |
| technology and management structure. The Chinese | | | | The china pharmaceutical industry has been a key |
| pharmaceutical industry also has a lower market | | | | contributor to the country's impressive economic |
| concentration and weak international trading | | | | growth. As one of the world's major producers of |
| competitiveness, coupled with a lack of patented | | | | pharmaceuticals, the sector achieved an annual |
| pharmaceuticals developed in-house. (Eliza Yibing Zhou; | | | | compound growth rate of 16.7% between 1978 and |
| 2007) | | | | 2003. Both far outpaced other economies in the world, |
| As China joins the World Trade Organization (WTO), it | | | | making China the world's fastest growing |
| will need to integrate more completely into the global | | | | pharmaceutical market. Although China has enjoyed |
| economy. The international competition will place an | | | | the benefits of an expansive market for |
| intense pressure on the Chinese pharmaceutical | | | | pharmaceutical production and distribution, the industry |
| industry . Accession to the WTO will bind China by | | | | is suffering from minimal innovation and investment in |
| fundamental WTO principles, such as improved | | | | R&D and new product development. The sector's |
| transparency and the strengthening of commercial | | | | economies of scale have yet to be achieved. Most |
| legal procedures. China's WTO commitments include | | | | domestic manufacturers in the pharmaceutical |
| the tightening of rules on intellectual property, tariff | | | | industries lack the autonomic intellectual property and |
| concessions, and market access of non-Chinese | | | | financial resources to develop their own brand name |
| service suppliers engaging in the distribution of | | | | products. Most manufacturers rely on the repetitive |
| pharmaceuticals. (Cheri Grace; 2004) | | | | production of low value added bulk pharmaceuticals |
| Investment conditions in China have improved due to | | | | and imitation drugs. |