Threats and opportunities for domestic pharma, as China plans to join WTO

With China's expected accession to the World Trade Organization, theresulting gradual lifting of protection for its domestic pharmaceutical companies will render most of the country's small-to-medium-sized drugmakers unable to compete effectively with global rivals, Zhao Xinxian, president of the Sanjiu Enterprise Group, has told a recent China Pharmaceutical Executive Forum meeting in Shanghai.

The fundamental problems of China's pharmaceutical industry relate to obsolete technology and outdated manufacturing methods, low levels of technical competence within the labor force and poor management, with a lack of awareness of market principles, said Mr Xinxian.

However, he added, opportunities do exist. The Chinese industry's relatively strong capability in drug copying should give it advantages in the production of patent-expired, generic and over-the-counter medicines, and this would be sharpened by improvements in manufacturing facilities, production efficiencies and management. China should be able to play on this strength, he said, particularly when selling on the domestic market and in exporting raw materials, where the Chinese industry is in competition with traditional raw-material exporting and low-cost producer countries such as India, the Scandinavian nations, Ireland, Spain, Romania, Italy and Greece.