As one of the world’s major trading hubs, Hong Kong is known for its exports of electronics, jewellery, food and clothing.

A lesser-known sector is the proprietary Chinese medicine (PCM) industry which recorded exports worth HK$2.88 billion (US$366 million) in 2024, principally to Mainland China (accounting for 70% of exports), Macao (20%) and ASEAN countries (6%).

Remarkably, 93% of PCM exports originated in Hong Kong which contrasts to many other product categories that are re-exports from offshore production bases.

These insights are just a few of the findings from a research report published by the Hong Kong Trade Development Council (HKTDC) titled Challenges and Opportunities in Hong Kong's Proprietary Chinese Medicine Industry.

The report analyses the development, challenges and export potential of Hong Kong’s PCM sector. According to the study, Hong Kong is home to approximately 2,000 companies engaged in PCM and Chinese herbal medicine-related businesses, spanning import/export, manufacturing, wholesale and retail. Of these, 264 enterprises are registered as local PCM manufacturers with most products tailored to the consumer market.

Local measures support industry

The report indicates that, in recent years, the Hong Kong SAR Government has actively promoted the development of Chinese medicine. One key initiative was setting up the Chinese Medicine Council of Hong Kong to oversee the registration and management of PCM products. As of this month, some 345 Hong Kong enterprises have registered a total of 8,244 products.

The sector received a major boost with the recent approval of clinical trials in the United States for a novel PCM targeting chronic constipation. Developed by the Centre for Chinese Herbal Medicine Drug Development at Hong Kong Baptist University (HKBU) and funded by the Innovation and Technology Commission, the formulation is based on the traditional Chinese remedy "Ma Zi Ren Wan”. According to HKBU Director and Associate Vice-President (Clinical Chinese Medicine) Prof. Bian Zhaoxiang, the innovation represents a major step forward in the standardisation and internationalisation of Chinese medicine.

In addition, Hong Kong's first Chinese medicine hospital is set to open in late 2025 to provide comprehensive Chinese medicine diagnostic and treatment services. Such measures will drive the popularisation of Chinese medicine therapies and products, according to the report.

Ready for the world

In terms of export markets, Mainland China is the world's largest PCM market valued at RMB450 billion (US$62 billion) and in recent years mainland regulators have implemented several measures to enhance access for Hong Kong PCM products. In 2021, approval procedures for topical medicines sold in Hong Kong and Macao were streamlined and this year the National Medical Products Administration further simplified regulations for oral medicines which have a minimum dispensing record in Hong Kong of 15 years and which comply with Good Manufacturing Practice (GMP) requirements.

The report notes the implementation of the streamlined registration procedures opens a channel for Hong Kong companies to expand into the Guangdong-Hong Kong-Macao Greater Bay Area and other markets.

Outside of China, many PCM products are categorised and regulated as herbal medicines, health foods or dietary supplements. However, many Southeast Asian countries have specific, similar legal requirements for PCM products, providing a clear pathway to enter these markets.

The report also discusses the rapid growth of e-commerce. For the mainland market, the report points out that certain PCM products for external use, such as Chinese medicinal wines and cooling oils, have been incorporated in the Cross-border E-commerce Retail Import Commodity List, allowing relevant products to be sold in mainland China through cross-border e-commerce channels.

HKTDC Principal Economist (Greater China) Wing Chu commented: "Hong Kong’s PCM products are highly regarded in southern China and among overseas Chinese communities, and the Mainland China streamlined approval procedures offer significant opportunities for Hong Kong businesses to expand into nearby cities and other mainland markets.”

“Additionally, the rise of online shopping enables companies to leverage cross-border e-commerce platforms to access mainland and overseas markets, provided they comply with the corresponding regulatory requirements.”

Conference set to accelerate progress

The publication of the report is timely, arriving just weeks before the International Conference of the Modernization of Chinese Medicine & Health Products to be held at the Hong Kong Convention and Exhibition Centre from 14 to 15 August 2025.

Jointly organised by the HKTDC, the International Association for Modernisation of Chinese Medicine and 10 science and research institutions, the event will gather scholars and experts from medical schools, research bodies, pharmaceutical companies and organisations from Mainland China, Hong Kong, Malaysia and Thailand.

The conference will focus on the latest research findings in the prevention and treatment of tumours, inflammation and cardiovascular and cerebrovascular diseases using traditional medicine.

Speakers will also present related clinical research outcomes and share successful case studies.