According to the consensus, traditional Chinese medicine (TCM) will fall in popularity as young people grow up and demand chemical medicines.
But Morgan Stanley’s Bin Li disagrees.
“TCM is becoming more popular. According to CEIC, growth in the TCM industry is higher than in the western medicine industry. TCM industry sales reached Rmb423bn in 2011, representing a 24% CAGR over 2003-11, versus 21% for western medicines. Based on our AlphaWise survey, nearly 30% of doctors trained in western medicine use TCM as a first-line therapy and 46% use TCM alone or together with western medicines to treat patients. Because TCM has a long history in China, many Chinese people, including the younger generation, prefer to use TCM to combat chronic diseases. Given the strong endorsement from physicians, we believe demand for TCM will remain high, as drug choices are generally made based on doctors’ recommendations.”