The Advantages and Disadvantages on the Chinese Market Term Paper

The Advantages and Disadvantages on the Chinese Market - Term Paper Example Further on the development of external trade in China is seen by analysts as an extremely positive trend. China has already outrun Japan to become the third largest merchandise trading country right after the USA and Germany. â€Å"Merchandise exports rose by 35.4%, with production at foreign-funded enterprises estimated at about 58% of exports. Merchandise imports grew by 36.0%† (Asian Development Bank, 2005, p.20). China’s participation in WTO was followed by political reforms of reducing import tariffs and removing non-tariff barriers. All these trends along with strong domestic and external demand make China extremely attractive as an opportunity to invest funds. Positive general economic trends have also influenced the pharmaceutical industry of China. The analysis of performance in 2004 has shown that â€Å"China's pharmaceutical industry continued to maintain a momentum of steady growth, achieving a stable rise in both output and sales revenues. Exports maintained a stable growth and there was a continuous improvement in the industry's international competitiveness† (Research in China, 2005). Chemical preparation industry has showed the greatest uptrend among the industry segments, while the raw chemical material industry grew slowly. Overall tendencies of 2004 indicate the shift from the race for greater market shares to more complex and comprehensive competition based on various factors. While the evaluation of recent performance of Chinese pharmaceutical industry has shown a considerable positive momentum, the forecast for this industry are even more optimistic. Despite the challenge of operating in China, it is the fastest growing pharmaceutical market, rising by 28% in 2004, versus 7% global growth. It is currently the ninth largest pharmaceutical market but at current growth rates China is likely to overtake Germany and France by 2015. (Business Insights, 2005) The government of China has realised the importance of pharmaceutical industry to the national economy and has taken pharmaceutics under central planning. Initiated reforms have influenced the pharmaceutical industry positively.