Favourable economic conditions are expected to continue to boost the growth of the pharmaceutical industry in China. The health of the pharmaceutical industry has been improving continuously since 2000 and is expected to get even better.

The Chinese pharmaceuticals market is forecast to become the world's firth largest by 2010 - and the largest by 2050. There are still greater market access following China's entry into the World Trade Organization (WTO), multinational investors continue to face a range of obstacles, many of which stem from the legacy of central planning of the industry.

These include complex distribution, under-developed retail options, intellectual property infringements and pricing controls and pressures. At the same time, the continuing reliance of leading domestic companies on generic drugs has prevented the emergence of Chinese brands.
However, the industry is still small-scale, with a scattered geographical layout, duplicated production processes, and outdated manufacturing technology and management structure.

The Chinese pharmaceutical industry also has a lower market concentration and weak international trading competitiveness, coupled with a lack of patented pharmaceuticals developed in-house.