China is an important global production and export supply base for chemical raw materials, with chemical raw material exports accounting for nearly 80% of the country's total Western medicine exports.
This article analyzes the current situation and development trend of China's chemical raw material drug exports from four aspects: export scale, destination, source province, and export access qualifications.
01
Export scale
The export value of chemical raw materials in China was only 3.3 billion US dollars.
It broke through the 10 billion US dollar mark for the first time and opened up a rapid upward channel. It took 4 years to go from 10 billion US dollars to 20 billion US dollars (22.7 billion US dollars in 2012), 6 years to go from 20 billion US dollars to 30 billion US dollars (30.05 billion US dollars in 2018), 3 years to go from 30 billion US dollars to 40 billion US dollars (41.8 billion US dollars in 2021), and only 1 year to go from 40 billion US dollars to 50 billion US dollars (51.56 billion US dollars in 2022).
The outbreak of the COVID-19 has caused serious damage to the major API bases in India and Italy, but the epidemic has been effectively controlled in China, production and operation have continued, and the export of API has increased significantly to make up for the global gap.
The export of API in China hit a record high (US $51.56 billion).
With the easing of the epidemic and the gradual resumption of normal production in major global raw material bases, overseas market demand has fallen, coupled with pressure to reduce inventory, resulting in a significant year-on-year decline of over 20% in the export value of raw materials.
The export of active pharmaceutical ingredients will return to a normal trend, with an export growth rate of 5.1%.
China's raw material exports reached 22.146 billion US dollars, a year-on-year increase of 3.76%. (See the following figure for details)
02
Export destination
Distribution of export destination countries
In terms of all continents, by 2024, China's exports of chemical raw materials will still be the highest in Asia and Europe, accounting for 44% and 29% respectively, totaling over 70% (73%). North America, Latin America, and Africa account for 12%, 11%, and 3% respectively.
In terms of export countries, India will have the largest export value in 2024, with exports of 6.13 billion US dollars, accounting for 14.3% of China's total exports, a slight decrease of 1% year-on-year;
Next is the United States, with exports of 4.52 billion US dollars, accounting for 10.5%, a year-on-year increase of 12%;
India and the United States together account for 1/4 of China's total exports.
Next are South Korea, Brazil, Japan, the Netherlands, and Germany, with export values ranging from 1.8 billion to 2.05 billion US dollars, accounting for 4% to 5% of the total;
Russia, Vietnam, and Indonesia rank 7th to 10th, with export values ranging from 1 billion to 1.4 billion US dollars. (See the following figure for details)
Export to India
Since 2020, although India has implemented a series of policies to encourage local production of active pharmaceutical ingredients in order to reduce external dependence. However, there has been no significant change in the trade pattern of raw materials between China and India. The export value of raw materials from China to India remains stable at around 6 billion US dollars, while the import value fluctuates between 700-800 million US dollars.
India's high dependence on the import of chemical raw materials from China is mainly due to the obvious advantages of China's basic chemical supporting facilities, supply chain system, comprehensive knowledge protection system, and "engineer dividend". According to KPMG, the average production cost of active pharmaceutical ingredients in China is 20% lower than that in India.
In the past 10 years (2014-2023), the average amount of chemical raw materials imported by India from China accounted for 67% of its total imports, and the average amount imported from China accounted for 63% of its total imports. The proportion of India's imports from China has increased from 64% in 2014 to 71% in 2023, an increase of 7 percentage points in 9 years. The proportion of imports has increased from 62% in 2014 to 75% in 2023, an increase of 13 percentage points in 9 years. (See the following figure for details)
03
Export source province
Below is a comparative analysis of the export volume of each province. Note: This refers to "export volume" rather than "export amount".
According to the statistics of the China Chemical Pharmaceutical Industry Association, in 2023, the export of chemical raw materials in China will be 573700 tons, accounting for 40.5% of the total production of chemical raw materials in that year. In addition to 10 provinces, including the capital Beijing, one province in the northeast (Heilongjiang), three provinces in the southwest (Yunnan, Guizhou, Xizang), four provinces in the northwest (Gansu, Qinghai, Ningxia, Xinjiang) and Hainan, the other 21 provinces have chemical APIs for export.
Among them, Hebei Province has the largest export volume, exporting 269000 tons in 2023, accounting for nearly half (46.8%) of the total national export volume. Next is Shandong, with exports of 179000 tons, accounting for nearly one-third (31.2%) of the country's total.
The total export volume of Hebei and Shandong provinces is 448000 tons, accounting for nearly 80% (78%) of the total national export volume in 2023. Hebei and Shandong provinces are the absolute kings in the production and export of bulk pharmaceutical raw materials in China.
The third and fourth places are Hubei and Zhejiang, with exports of 49000 tons and 31000 tons respectively, accounting for 8.6% and 5.5%.
Tianjin and Shaanxi have the lowest export volume, both only exporting 3 tons, and Chongqing's export (9 tons) is less than 10 tons. (See the following figure for details)
04
Export Qualification
To export, one must first obtain admission qualifications from the drug certification organization of the other country. In recent years, the number of access qualifications approved by international pharmaceutical regulatory organizations for Chinese raw material pharmaceutical companies has grown rapidly, but still lags behind India.
DMF from the United States
As of the end of 2023, among the DMF documents released and still valid by the US FDA, India is far ahead with 4773, while China ranks second with 1469, accounting for about one-third of India's total. China and India are also the only two countries with over a thousand DMF documents.
Italy (797 cases), Israel (406 cases), and the United States (361 cases) ranked 3rd to 5th respectively;
Taiwan, China (225), Spain (209), Japan (208), the European Union (171) and Germany (135) ranked 6-10 respectively.
In terms of the number of DMF holders, China ranks first (335) and India ranks second (183);
Next are Japan (64) and Italy (54), both exceeding 50. (See the following figure for details)
European CEP
As of the end of 2023, the European Medicines Agency has issued a total of 3125 valid "European Pharmacopoeia Practical Certification" (CEP) certificates, with India having the highest number of 1565, accounting for half.
China ranks second with a total of 536 items, accounting for over 1/6 (17.2%) of the total, and only about 1/3 of India's.
China and India together account for over two-thirds (67.2%) of the total number of CEP documents.
Following closely behind are Italy (205 cases), Germany (133 cases), and Spain (111 cases), accounting for 6.6%, 4.3%, and 3.6% respectively.
The above-mentioned five countries account for over 80% (81.6%) of the total number of CEP documents.
Israel (88 cases), the United States (65 cases), and France (55 cases) rank 6th to 8th respectively;
Switzerland, Taiwan, China, and Poland tied for the 9th place, with 30 pieces each;
Japan (25 cases), Hungary (24 cases), Finland (20 cases), and South Korea (6 cases) ranked 10th to 13th respectively.
Like DMF files, the number of CEP certificates in China is less than that in India, but the number of holders is higher, with 158 CEP holders in China and 155 in India. Italy (32) and Germany (31) both have over 30, while the United States and Spain each have 25. (See the following figure for details)
China holds a pivotal position in the global chemical raw material industry and will continue to play an even more important role.