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New Changes in China's Pharmaceutical Foreign Trade: Export of Western Pharmaceutical Products in 2023 May "First Suppress and Later Increase"
2023/5/29
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Century Economic Report Reporter Zhu Ping Intern Wei Xin Beijing Report"Since the outbreak of the COVID-19,the fluctuations in the export of epidemic prevention products at different stages have profoundly affected the overall trend of China's pharmaceutical foreign trade in the past three years.Despite the challenges of unstable demand,poor logistics,soaring raw material prices,exchange rate shocks and other challenges,with the help of relevant policies,and with its own industrial chain and supply chain advantages,China's pharmaceutical foreign trade has still achieved excellent results,showing full development resilience."Recently,Zhou Hui,President of the China Chamber of Commerce for Import and Export of Medical and Health Products,pointed out at a media communication meeting.
Zhou Hui pointed out that,like some other industries,pharmaceutical foreign trade is also affected by complex external environments,and is facing more intense market competition under global localized production.The main contradiction in China's foreign trade sector,such as the uncertainty of the external environment,has shifted from last year's supply chain obstruction and insufficient contractual capacity to the current weakening of external demand and a decline in orders.
But while facing challenges,there are also opportunities.In 2023,due to the impact of the epidemic,the constraints of frequent restrictions on overseas market development have been improved,which has provided benefits for enterprises to stabilize customers and seize the market.Smooth international exchanges have brought vitality to the recovery and growth;2023 will also benefit from the"the Belt and Road"initiative that has been put forward for the 10th anniversary and from the positive factors of RCEP.Among them,the countries along the"the Belt and Road"are mainly emerging markets,with a large population base and market capacity,relatively weak public health systems,and relatively weak pharmaceutical industry foundation,which provide many opportunities for cooperation in the medical and health field.
Regarding the year-on-year decline in the overall export of Western medicine products in the first quarter,Cao Gang,director of the Western Medicine Department of the China Medical and Healthcare Export Chamber of Commerce,analyzed and pointed out that reviewing monthly export data shows that since the fourth quarter of last year,the export amount of Western medicine products has rebounded after experiencing a trough in November.However,the month on month decrease in February this year is due to the time required for resumption of work and production after the Spring Festival holiday,as well as the lagging effect of overseas customer order destocking.
Nevertheless,the frequently fluctuating external environment,changes in international market demand,constantly tightening regulatory pressure,and international business environment still pose challenges to the recovery and growth of China's Western medicine export trade.
The complex and ever-changing international situation,the tense geopolitical situation,and the continuous rise in prices of basic production factors such as oil,coal,metals,and grain have all affected the production costs and selling prices of the pharmaceutical industry,especially for the large-scale raw material and drug exports that rely on price advantages to compete for overseas markets.
At the beginning of 2022,affected by the conflict between Russia-Ukraine conflict,Ukraine's corn export focus turned to Europe.The increase in China's corn import price was transmitted to its downstream deep processing industry,and the average export prices of lysine and citric acid also rose.Fortunately,with the adjustment of China's corn import structure and stable supply chain this year,the export prices of lysine and citric acid related raw materials have also fallen.
In terms of international market demand,starting from 2022,due to changes in the international epidemic prevention situation and awareness,the demand for epidemic prevention medical supplies and drugs has significantly decreased.Zhou Hui analyzed that this trend will continue in 2023.At the same time,internationally,in order to reduce dependence on China,multiple countries support the localization and industrial backflow of the pharmaceutical industry chain;In China,multiple new and expanded projects for raw materials have emerged,increasing the risk of overcapacity.The main contradiction in China's foreign trade sector has shifted from last year's supply chain obstruction and insufficient fulfillment capacity to the current weakening of external demand and a decrease in orders
At the same time,the important markets for China's drug export trade,the European Union and the United States,have increased their regulatory efforts.In March 2022,the US Congress requested the FDA to carry out a pilot program to increase on-site inspections of overseas drug production.In 2023,the FDA may resume some overseas on-site inspections,which poses a significant challenge to China's expansion of raw materials and preparations for export to the United States.The European Commission has updated a series of regulatory documents such as the GMP appendix for imported drugs and clinical trial regulations,which have put forward stricter requirements for product quality assurance and data transparency for enterprises.It is also necessary for Chinese import and export enterprises to adapt.
Under the new situation,the new and old problems of different international business environments still plague Chinese pharmaceutical companies seeking to go overseas and deepen cooperation.China is a major exporter of traditional bulk raw materials and has a significant price advantage due to its long domestic supply chain and industrial chain.However,some enterprises are accustomed to adopting a price competition model when layout the international market,engaging in a"price war"that affects the normal market activities and overall industry development of other enterprises,and to some extent disrupts the order of the export market.At the same time,it is also not conducive to the improvement of the brand image of Chinese products.
In the process of opening up markets such as Europe and America,Chinese pharmaceutical companies face traditional problems such as high barriers,high standards,and complex rules.In the process of expanding into emerging markets such as Latin America,Africa,and the Middle East,they often face problems such as weak infrastructure support,difficulty in implementing preferential policies,and disorderly competition in the business environment.
The current international supply chain pattern is accelerating reconstruction,and the environment for foreign trade development is becoming increasingly severe.As a part of the foreign trade pattern,pharmaceutical foreign trade cannot be isolated and is also affected by the rapidly changing environment.However,challenges and opportunities coexist,and objective factors such as the resumption of international exchanges after the epidemic,as well as further improvement of the domestic support policy system,will help restore the momentum of China's drug exports.
In terms of exports,Western medicine products may exhibit a trend of"first suppressing and then increasing"in 2023.In terms of imports,in the context of the transformation and upgrading of China's raw material pharmaceutical industry,downstream formulation research and production are developing towards a higher level.The continuous prosperity of CDMO business has also stimulated China's demand for raw material pharmaceutical imports.
Overall,pharmaceutical exports in 2023 may show a trend of"low in the front and high in the back".On the one hand,epidemic prevention products have rapidly declined from the second half of last year,which will gradually weaken the negative impact on the year-on-year growth rate of pharmaceutical exports this year.On the other hand,pharmaceutical exports in the second half of the year will significantly stop falling and stabilize in year-on-year data,gradually achieving growth with the global market recovery.
International exchange and overseas strength
In 2023,due to the constraints of the epidemic in the past,enterprises that were unable to expand overseas markets saw a turnaround,and the resumption of smooth international exchanges provided a favorable opportunity for stabilizing customers and opening up markets.Medical and health exhibitions in various countries are favored by Chinese enterprises,and governments from various regions in China have organized multiple batches of enterprises to participate overseas.Various chambers of commerce and associations,including the Medical Insurance Chamber of Commerce,have assisted enterprises in business exchanges abroad.
Internationalized exhibitions held domestically,such as the Canton Fair,will resume one after another,and various factors will promote the recovery and further development of pharmaceutical foreign trade.From June 19 to 21,2023,the 21st CPHI China,organized by Informa Markets and the China Chamber of Commerce for Import and Export of Medical and Health Products(CCCMHPIE),and co organized by Sinoexpo Informa Markets in Shanghai,will be held at the Shanghai New International Expo.
After more than 20 years of deep cultivation in the medical industry,this exhibition provides a professional platform for pharmaceutical companies to optimize their industrial chain layout and external cooperation.Zhao Jingman,Director of the Exhibition Department of the China Medical and Healthcare Export Chamber of Commerce,introduced that this year's World Pharmaceutical Raw Materials China Exhibition is the exhibition that has been restored since the epidemic.With the help of the"Opinions on Promoting Stable Scale and Optimal Structure of Foreign Trade"issued by the General Office of the State Council and more than 80 forum activities held during the same period,it provides a solid foundation for boosting the confidence of Chinese pharmaceutical enterprises in international cooperation.
In the field of industry,the"14th Five Year Plan"for the development of the pharmaceutical industry clearly states that"accelerating international development"is one of the important development goals.The internationalization of pharmaceutical regulation in China is also constantly deepening.In August 2022,the World Health Organization(WHO)announced that China has passed the National Regulatory System for Vaccines(NRA)assessment,which will promote China's pharmaceutical industry to further integrate with the world and improve the level of international development.
In the field of foreign trade,the General Office of the State Council issued the"Opinions on Promoting the Stability and Quality Improvement of Foreign Trade"in May 2022,providing more assistance for China's pharmaceutical foreign trade to stabilize its stock and boost its growth;Since last year,six departments including the Ministry of Commerce have introduced policies and measures to smooth the channels for foreign trade enterprises to seize orders,revised the Foreign Trade Law,and cancelled the registration of foreign trade operators.
Affected by the favorable factors of RCEP,multiple domestic pharmaceutical companies have launched cooperation projects with overseas pharmaceutical companies to promote joint development and commercialization of new drugs,establish laboratories,and jointly build research and development and production bases.For example,WuXi AppTec plans to invest US$1.43 billion in Singapore to establish R&D and production bases,and expand its overseas CRDMO(contract research,development and production)and CTDMO(contract testing,R&D and production)business models.
In the past decade,the"the Belt and Road"has become an important international cooperation system built by China.The developing countries are mainly along the line,and its emerging markets,huge population base and market capacity provide China's import and export pharmaceutical enterprises with sea areas that can be explored;Its relatively fragile public health system and weak pharmaceutical industry foundation provide more opportunities for Chinese pharmaceutical companies to deepen cooperation with them.
Among them,many pharmaceutical enterprises have achieved success in overseas markets with the help of the"the Belt and Road".North China Pharmaceutical Group,Green Leaf Pharmaceutical,Junshi Pharmaceutical,Neusoft Medical and other enterprises have achieved commercial coverage in high potential emerging markets such as Latin America,Africa and Eastern Europe by virtue of drugs,large medical equipment or medical diagnostic services.Profound cooperation practices and rich successful experience have proved that the"the Belt and Road"has become a feasible way to recover China's drug export trade.
Zhou Hui pointed out that,like some other industries,pharmaceutical foreign trade is also affected by complex external environments,and is facing more intense market competition under global localized production.The main contradiction in China's foreign trade sector,such as the uncertainty of the external environment,has shifted from last year's supply chain obstruction and insufficient contractual capacity to the current weakening of external demand and a decline in orders.
But while facing challenges,there are also opportunities.In 2023,due to the impact of the epidemic,the constraints of frequent restrictions on overseas market development have been improved,which has provided benefits for enterprises to stabilize customers and seize the market.Smooth international exchanges have brought vitality to the recovery and growth;2023 will also benefit from the"the Belt and Road"initiative that has been put forward for the 10th anniversary and from the positive factors of RCEP.Among them,the countries along the"the Belt and Road"are mainly emerging markets,with a large population base and market capacity,relatively weak public health systems,and relatively weak pharmaceutical industry foundation,which provide many opportunities for cooperation in the medical and health field.
Regarding the year-on-year decline in the overall export of Western medicine products in the first quarter,Cao Gang,director of the Western Medicine Department of the China Medical and Healthcare Export Chamber of Commerce,analyzed and pointed out that reviewing monthly export data shows that since the fourth quarter of last year,the export amount of Western medicine products has rebounded after experiencing a trough in November.However,the month on month decrease in February this year is due to the time required for resumption of work and production after the Spring Festival holiday,as well as the lagging effect of overseas customer order destocking.
Nevertheless,the frequently fluctuating external environment,changes in international market demand,constantly tightening regulatory pressure,and international business environment still pose challenges to the recovery and growth of China's Western medicine export trade.
The complex and ever-changing international situation,the tense geopolitical situation,and the continuous rise in prices of basic production factors such as oil,coal,metals,and grain have all affected the production costs and selling prices of the pharmaceutical industry,especially for the large-scale raw material and drug exports that rely on price advantages to compete for overseas markets.
At the beginning of 2022,affected by the conflict between Russia-Ukraine conflict,Ukraine's corn export focus turned to Europe.The increase in China's corn import price was transmitted to its downstream deep processing industry,and the average export prices of lysine and citric acid also rose.Fortunately,with the adjustment of China's corn import structure and stable supply chain this year,the export prices of lysine and citric acid related raw materials have also fallen.
In terms of international market demand,starting from 2022,due to changes in the international epidemic prevention situation and awareness,the demand for epidemic prevention medical supplies and drugs has significantly decreased.Zhou Hui analyzed that this trend will continue in 2023.At the same time,internationally,in order to reduce dependence on China,multiple countries support the localization and industrial backflow of the pharmaceutical industry chain;In China,multiple new and expanded projects for raw materials have emerged,increasing the risk of overcapacity.The main contradiction in China's foreign trade sector has shifted from last year's supply chain obstruction and insufficient fulfillment capacity to the current weakening of external demand and a decrease in orders
At the same time,the important markets for China's drug export trade,the European Union and the United States,have increased their regulatory efforts.In March 2022,the US Congress requested the FDA to carry out a pilot program to increase on-site inspections of overseas drug production.In 2023,the FDA may resume some overseas on-site inspections,which poses a significant challenge to China's expansion of raw materials and preparations for export to the United States.The European Commission has updated a series of regulatory documents such as the GMP appendix for imported drugs and clinical trial regulations,which have put forward stricter requirements for product quality assurance and data transparency for enterprises.It is also necessary for Chinese import and export enterprises to adapt.
Under the new situation,the new and old problems of different international business environments still plague Chinese pharmaceutical companies seeking to go overseas and deepen cooperation.China is a major exporter of traditional bulk raw materials and has a significant price advantage due to its long domestic supply chain and industrial chain.However,some enterprises are accustomed to adopting a price competition model when layout the international market,engaging in a"price war"that affects the normal market activities and overall industry development of other enterprises,and to some extent disrupts the order of the export market.At the same time,it is also not conducive to the improvement of the brand image of Chinese products.
In the process of opening up markets such as Europe and America,Chinese pharmaceutical companies face traditional problems such as high barriers,high standards,and complex rules.In the process of expanding into emerging markets such as Latin America,Africa,and the Middle East,they often face problems such as weak infrastructure support,difficulty in implementing preferential policies,and disorderly competition in the business environment.
The current international supply chain pattern is accelerating reconstruction,and the environment for foreign trade development is becoming increasingly severe.As a part of the foreign trade pattern,pharmaceutical foreign trade cannot be isolated and is also affected by the rapidly changing environment.However,challenges and opportunities coexist,and objective factors such as the resumption of international exchanges after the epidemic,as well as further improvement of the domestic support policy system,will help restore the momentum of China's drug exports.
In terms of exports,Western medicine products may exhibit a trend of"first suppressing and then increasing"in 2023.In terms of imports,in the context of the transformation and upgrading of China's raw material pharmaceutical industry,downstream formulation research and production are developing towards a higher level.The continuous prosperity of CDMO business has also stimulated China's demand for raw material pharmaceutical imports.
Overall,pharmaceutical exports in 2023 may show a trend of"low in the front and high in the back".On the one hand,epidemic prevention products have rapidly declined from the second half of last year,which will gradually weaken the negative impact on the year-on-year growth rate of pharmaceutical exports this year.On the other hand,pharmaceutical exports in the second half of the year will significantly stop falling and stabilize in year-on-year data,gradually achieving growth with the global market recovery.
International exchange and overseas strength
In 2023,due to the constraints of the epidemic in the past,enterprises that were unable to expand overseas markets saw a turnaround,and the resumption of smooth international exchanges provided a favorable opportunity for stabilizing customers and opening up markets.Medical and health exhibitions in various countries are favored by Chinese enterprises,and governments from various regions in China have organized multiple batches of enterprises to participate overseas.Various chambers of commerce and associations,including the Medical Insurance Chamber of Commerce,have assisted enterprises in business exchanges abroad.
Internationalized exhibitions held domestically,such as the Canton Fair,will resume one after another,and various factors will promote the recovery and further development of pharmaceutical foreign trade.From June 19 to 21,2023,the 21st CPHI China,organized by Informa Markets and the China Chamber of Commerce for Import and Export of Medical and Health Products(CCCMHPIE),and co organized by Sinoexpo Informa Markets in Shanghai,will be held at the Shanghai New International Expo.
After more than 20 years of deep cultivation in the medical industry,this exhibition provides a professional platform for pharmaceutical companies to optimize their industrial chain layout and external cooperation.Zhao Jingman,Director of the Exhibition Department of the China Medical and Healthcare Export Chamber of Commerce,introduced that this year's World Pharmaceutical Raw Materials China Exhibition is the exhibition that has been restored since the epidemic.With the help of the"Opinions on Promoting Stable Scale and Optimal Structure of Foreign Trade"issued by the General Office of the State Council and more than 80 forum activities held during the same period,it provides a solid foundation for boosting the confidence of Chinese pharmaceutical enterprises in international cooperation.
In the field of industry,the"14th Five Year Plan"for the development of the pharmaceutical industry clearly states that"accelerating international development"is one of the important development goals.The internationalization of pharmaceutical regulation in China is also constantly deepening.In August 2022,the World Health Organization(WHO)announced that China has passed the National Regulatory System for Vaccines(NRA)assessment,which will promote China's pharmaceutical industry to further integrate with the world and improve the level of international development.
In the field of foreign trade,the General Office of the State Council issued the"Opinions on Promoting the Stability and Quality Improvement of Foreign Trade"in May 2022,providing more assistance for China's pharmaceutical foreign trade to stabilize its stock and boost its growth;Since last year,six departments including the Ministry of Commerce have introduced policies and measures to smooth the channels for foreign trade enterprises to seize orders,revised the Foreign Trade Law,and cancelled the registration of foreign trade operators.
Affected by the favorable factors of RCEP,multiple domestic pharmaceutical companies have launched cooperation projects with overseas pharmaceutical companies to promote joint development and commercialization of new drugs,establish laboratories,and jointly build research and development and production bases.For example,WuXi AppTec plans to invest US$1.43 billion in Singapore to establish R&D and production bases,and expand its overseas CRDMO(contract research,development and production)and CTDMO(contract testing,R&D and production)business models.
In the past decade,the"the Belt and Road"has become an important international cooperation system built by China.The developing countries are mainly along the line,and its emerging markets,huge population base and market capacity provide China's import and export pharmaceutical enterprises with sea areas that can be explored;Its relatively fragile public health system and weak pharmaceutical industry foundation provide more opportunities for Chinese pharmaceutical companies to deepen cooperation with them.
Among them,many pharmaceutical enterprises have achieved success in overseas markets with the help of the"the Belt and Road".North China Pharmaceutical Group,Green Leaf Pharmaceutical,Junshi Pharmaceutical,Neusoft Medical and other enterprises have achieved commercial coverage in high potential emerging markets such as Latin America,Africa and Eastern Europe by virtue of drugs,large medical equipment or medical diagnostic services.Profound cooperation practices and rich successful experience have proved that the"the Belt and Road"has become a feasible way to recover China's drug export trade.
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