【专栏】| Conlumists

For Sale

By Chen Ya，Jointing.Media, in HongKong, 2023-11-30

Since the resumption of customs clearance between Shenzhen and Hong Kong this year, there have been media reports of a flood of “reverse shopping”. Just in time to go to Hong Kong, visit Hong Kong pharmacy, found that it is still crowded, tourists “punch” heat is still. The most popular products are those producs made in Hong Kong, Japan, Singapore and Thailand. I cannot help but wonder, “If there is such a strong demand for these products in the Chinese domestic market, why are these companies of products not developing the mainland market?”

Friend was born in Hong Kong, although he grew up with Western education, studied in Europe and worked in Europe and the United States for many years, but he also studied the business environment in the mainland: “First, the cost of the channel is very high, and second, it is difficult to control the quality. The quality of genuine goods in regular pharmacies in Hong Kong is guaranteed. This statement immediately reminded me of China’s longstanding food safety problems. To prescribe the right medicine, the medicine will cure the disease. The quality of our infant formula has not been well managed, and it is indeed difficult to ensure that the medicine is good.

Although China is the birthplace of Chinese medicine and has a huge market base, it is far less advanced than Japan in the modernization of proprietary Chinese medicines. Ostensibly, this is because the Japanese have applied the technology of the Western pharmaceutical and chemical industries to the mass production of Chinese herbal preparations, and have adopted a much stricter level of quality control than the Chinese.

According to the Japan Association of Chinese Herbal Pharmaceutical Preparations, 80% of Japan’s raw medicines are produced in China. Japan’s largest Chinese medicine company Tsumura in China has established more than 70 Chinese herbal medicine production quality management standard (GAP) planting bases, as a comparison, the domestic Baiyunshan GAP base of more than 60, the Ministry of Commerce identified the first batch of “old Chinese” a Tongrentang only 12, the strength of the disparity. Overseas for Chinese herbal medicine has two core requirements, one is the safety indicators, the second is to require traceability. Japan at least need to test more than 200 safety indicators, the Europeans need to test more than 400 indicators. For example, check whether the heavy metals such as aflatoxin, lead, zinc, iron, cobalt, nickel, vanadium, niobium, tantalum, titanium, manganese, cadmium, mercury, tungsten and so on are above the standard, or whether there are residual pesticides. And most of the Chinese herbal medicines circulating in the domestic market are not checked for pesticide indicators.

My friend in Hong Kong uses Chinese traditional patent medicine, but he does not trust “Chinese medicine”. The reasons are the treatment method and the government’s ability to control it.

Many of his friends have similar views that medicines must undergo relevant scientific experiments such as double-blind tests, who are generally highly educated and most have studied in the West or lived overseas for many years.

Japanese Kampo medicines are marketed according to the standards of Western medicine, and their effectiveness has been proven by a whole series of scientific methods. So this friend of mine thinks that the research and production process of Japanese Kampo medicine is rigorous and no different from Western medicine.

What he really believes in is the Western scientific system. Under this scientific system, products are standardized to ensure a consistent formula with the same efficacy.

To a certain extent, standardized treatment protocols and drugs have indeed unleashed the productivity of doctors and treated more patients. However, doctors are not workers on the assembly line of a factory, and what they face is not the repair and assembly of industrial product parts, but the complexity of the mechanism of multi-organ high correlation, physical and mental interactions, which is still being explored.

The core of Chinese medicine, which treats the symptom but not the disease, is treatment based on syndrome differentiation. If the diagnosis is wrong, the subsequent treatment is wrong. Individual symptoms are independent and multiple symptoms are correlated. How to diagnose and predict quickly, and how to use the most concise prescription or treatment method will be a test of medical skill. Therefore, different TCM practitioners will use different treatments and prescriptions for the same disease and the same patient. This is the flexibility of TCM.

The second factor is the environment or called the government’s ability. The same Chinese traditional patent medicine, using the same workers, in the mainland production is difficult to ensure the quality and the source of herb cultivation is difficult to control. It is about the whole administrative system not individual or anyone firm. According to my friend’s point of view, Hong Kong will be stronger than mainland Chinese cities, because after all, Hong Kong has a long history of abiding by the rules, the punishment is relatively severe, relatively more rule of law, and the makers of industry rules have been elected by the people, who give votes for whom. On the contrary， if these makers are not elected but appointed by their superiors, their superiors’ satisfaction with them, not the public, is the key to their promotion.

Oranges turn to bitter fruits when moved north of the Huai River.

Products produced on the same land are subject to high standards if they are for export, while those entering the domestic market are subject to low standards. Every step of the production process determines the quality of the final outcome. Who is responsible for this production result? Who profits or suffers due to the quality of the outcome? Rational individuals pursue gains and avoid losses; providing sufficient incentives can lead to high-standard output, and strong penalties can achieve the same effect. In my opinion, “it is not that it cannot be done, but that it is not done.” Technology is not an issue, and there are also management methods from other sources that can be learned and借鉴. It takes more than one cold day to freeze three feet of ice; to break the existing chain of interests, it is necessary to introduce disruptors. The weighing of short-term and long-term interests lies with those in higher positions, not the lower ones. Such situations are common across various industries.

But it is also this ambiguity that leads some people do not believe in CTM： there is no standard of treatment, cure or not all depends on what kind of doctor encountered. After all, it is not easy to judge whether the doctor is reliable threshold for ordinary people. While there is a uniform standard of Chinese herbal medicine have administrative departments to gatekeeper, ordinary people recognize is the “official” word of credit endorsement. Although official credit has a natural authority, it can be destroyed at any time.

The second factor is the environment or called the government’s ability. The same Chinese traditional patent medicine, using the same workers, in the mainland production is difficult to ensure the quality and the source of herb cultivation is difficult to control. It is about the whole administrative system not individual or anyone firm. According to my friend’s point of view, Hong Kong will be stronger than mainland Chinese cities, because after all, Hong Kong has a long history of abiding by the rules, the punishment is relatively severe, relatively more rule of law, and the makers of industry rules have been elected by the people, who give votes for whom. On the contrary， if these makers are not elected but appointed by their superiors, their superiors’ satisfaction with them, not the public, is the key to their promotion.

Oranges turn to bitter fruits when moved north of the Huai River. Products produced on the same land are subject to high standards if they are for export, while those entering the domestic market are subject to low standards. Every step of the production process determines the quality of the final outcome. Who is responsible for this production result? Who profits or suffers due to the quality of the outcome? Rational individuals pursue gains and avoid losses; providing sufficient incentives can lead to high-standard output, and strong penalties can achieve the same effect. In my view, it’s not a matter of inability but of unwillingness. The issue isn’t technical—there are proven management methods and best practices to learn from. However, deep-rooted problems aren’t solved overnight. Breaking existing interest chains and introducing disruptors require balancing short-term and long-term interests, a responsibility that lies at the top rather than the bottom. Such phenomena are not unique; they are prevalent across all industries.”

This friend mentioned that “the channel costs in mainland China are particularly high,” hinting at the underlying issue of industry “unspoken rules” driving up the intangible costs of introducing overseas traditional Chinese medicine products to the market. If these additional costs cannot be passed on to consumers, they inevitably eat into companies’ profit margins. When you take into account the data uncovered by the ongoing anti-corruption efforts in the healthcare sector in recent years, the extent of these hidden costs becomes quite clear. Of course, there are deeper factors at play as well. That said, these are matters that extend beyond the scope of a casual conversation he and I might have on the streets of Hong Kong today.

An ant cannot shake a tree, and an individual cannot change the environment. Either the international macro-environment alters the national micro-environment, or the national macro-environment reshapes the industry micro-environment, which in turn influences individual choices. What kind of tide is truly irreversible? From this perspective, going with the flow seems to be the right choice—and indeed, it is the choice most people make. Our current situation is ultimately the result of our own decisions.

Edited by Wind、DeepL write

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