Feature

Analysis on the regional development of Macao’s Traditional Chinese Medicine Industry based on the Model of Industry Chain

According to the “Outline of the 14th Five-Year Plan for National Economic and Social Development of the People’s Republic of China and the Long-Range Objectives Through the Year 2035”, the inheritance, innovation and development of Traditional Chinese Medicine(‘TCM’) will be promoted in the next half decade. As early as 2016, under the strategy of “Healthy China”, the importance of Chinese medicine in the healthcare development of China has been raised with an increasing number of preferential policies launched by the government. Besides, the gradual improvement of living standard has also enhanced residents’ attention towards healthcare. In short, the support of national policy, the increase of living standard and the higher demand on healthcare become huge impetuses to the development of TCM industry in China.

In an effort to understand the development potential and sustainability of TCM as an economic industry, the industrial value chain of the industry should be first conceptualized and modeled. Based on the ground pattern of TCM, each sector in the value chain will be defined and grouped from upstream to downstream sectors. The development and organization of resources, manufacture and sales, consumption of Chinese medicine product are the core industries in the up-, mid- and downstream sector respectively. Among the main value chain, there are lots of related industries. Therefore, the whole industrial value chain of TCM is enormous, so as the mesne profit within the industry.

The conceptualized model of industrial chain is conducive to the analysis of the regional development of TCM industry in the Guangdong-Hong Kong-Macao Greater Bay Area and to the findings of development gaps and opportunities. By the comparison of regional policies, one can discover that Guangzhou, Foshan and Dongguan are interested in the development and enhancement of the overall industrial chain. On the other hand, Huizhou and Zhaoqing are focusing on the resources development in the upstream sector. In the midstream sector, while Hong Kong is focusing on the trade of Chinese medicine, Macao and Zhuhai are building up the services on international certification and quality control. For regions focusing on downstream sector, Shenzhen and Jiangmen are developing the practical usage of Chinese medicine in healthcare while Macao and Zhuhai are addressing the terminal consumption of Chinese medicine, for example, the services of “Massive Health”.

In order to achieve resources integration and fill up the development gap, the cooperation between regions in the Guangdong-Hong Kong-Macao Greater Bay Area will enhance the connectivity of the whole industrial chain. Increasing the penetration rate in the midstream industry is worth for detailed research in Macao. For example, introducing more sizable and well-known Contract Research Organizations (CRO) and service trade and outsourcing companies in the midstream sector, or attracting more companies to set up Chinese-Foreign Equity Joint Ventures, are important topics for further study. Macao is now deliberating law governing the Traditional Chinese Pharmacies and registration of TCM, which is beneficial to the development of TCM in Macao. With law and penalty system to go by, together with the protection of intellectual property and patent law with international standards, the incentives and attractiveness to set up TCM companies/organizations in Macao will be raised.

Besides, Macao and the Portuguese-speaking Countries (PSCs) have maintained close relations over the centuries. Macao shares with PSCs similar administrative and legal system and culture, as well as the same official language. Therefore, the promotion of Chinese medicine product and services in the aspect of economic industry and the propagation of Chinese medicine in the aspect of culture can both utilize the advantages of Macao’s platform and promote within the PSCs. This will accelerate the trade of Chinese medicine products between China and PSCs, increase the publicity of Chinese medicine, as well as extending the value chain of TCM industry in a global scale.