Will Hong Kong maintain its position of being the leader of the Traditional Chinese Medicine Market after China Accession to World Trade Organisation?

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Will Hong Kong maintain its position of being the leader of the Traditional Chinese Medicine Market after China Accession to World Trade Organisation?

- An analysis of Hong Kong's Traditional Chinese Medicine market and it's future



As a colony of UK, Hong Kong joined WTO on 1st January of 1995. Despite its small physical size and a population of only 7 million, Hong Kong currently ranks as the 10th largest trading entity in the world, with trade valued at some US$400 billion per year. It is the strategic trade services platform connecting the USA, Western Europe and mainland of China. This highly energised platform is infused with ideas, talent and connectivity. It leverages a critical mass of business networks in the Chinese mainland and overseas.

As a gate to the "mysterious" orient, Hong Kong had been a major port and trade centre for the exotic Far Eastern produces such as Traditional Chinese Medicine (TCM). The tiny TCM industry1 was well established prior to Hong Kong's assertion to WTO in 1995. The trades took the form of retail, wholesale or transit. The trade volume had been relatively small, yet it has enjoyed quite steadily growth for decades.

In October 1997, Hong Kong reunited as a part of China, while keeping its democratic political system and capitalistic market economy. In December last year, China has finally become a member of the WTO. These changes would inevitably create challenges and opportunities to the small TCM market in Hong Kong.

This essay is going to explore Hong Kong's traditional Chinese medicine market through four aspects. First, it is necessary to understand the differences between the TCM and the "Western medicine" to appreciate the full potential of the TCM market. Secondly, we need to understand the current TCM market both in Hong Kong and China, especially to understand the changes in the market conditions after China's assertion of WTO. Third part, probably the most important part, I will seek the strength and opportunities when facing these new challenges for Hong Kong. On the final section, I will try to identify the role Hong Kong government played to sustain competitiveness in this small industry.

The Traditional Chinese Medicine Vs Western Medicine

Chinese Medicine

Western Medicine

Diagnosis is based on the changes in the whole body

Diagnosis based on localised changes of the body

Treatments aim at achieving balanced state by self -regulation

Treatments differ from person to person

Treatments are symptom-oriented

Treatments are targeted at the pathogens or other cellular causes of diseases

Western medicine is generally more efficient than Traditional Chinese Medicine in short run. Patient uses western medicine usually can be cured quicker than use of TCM. Meanwhile, owe to the weaknesses of TCM that they are difficult to carry, time consuming to prepare, slow in effect and the bad animal-rights publicity, many people have deserted Chinese medicine to go for Western medicine. TCM is generally accepted as curing rather than merely relieving the symptoms, and at the same time low in toxicity and other side effects. Chinese medicine is believed to have the ability to strengthen the function of our body systems and increase health.

The experts also believe that it is due the fact that as the whole world is gradually stepping into a senior-aged society, traditional Chinese medicine, mild but especially effective against the chronic diseases that usually afflicts older people. With the current trend of advocating natural medicine and returning to nature, more and more people worldwide have begun to accept China's ancient herbal treatments. Statistics show that herbal medicines have been applied in over 130 countries and regions around the world2. More than 120 countries have established special organisations for research into and development of traditional Chinese medicine. In light of the direction of modern Chinese medicine development, and improved supervision and management in terms of manufacturing and sale of Chinese medicine, consumer confidence in and demand of Chinese medicine will increase, hence, rising market share of Chinese medicine.
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The world's Chinese medicine market is worth US$20 billion a year (see table below as an example3) and growing. There seems to be an insatiable appetite for health


US Herbal and Plant Product Sales in Grocery Stores, Chemists (Drug Stores) and Supermarkets (Sales, US$)









St John's Wort




Saw Palmetto




Evening Primrose Oil


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