US-based Guangyi Expo Group Inc and Guangxi Guangyi Chinese Medical Herb Co Ltd inked an agreement yesterday in Nanning, capital city of Southwest China's Guangxi Zhuang Autonomous Region, to construct an international medicine exhibition centre and establish a joint venture, reported China Daily on Tuesday.

The centre, with an investment totaling 1 billion yuan (US$120 million), will be located in the China-ASEAN Economic Zone and is expected to begin operation in August 2006, according to Foster Liao, general manager of Guangyi Expo Group Inc.

The joint venture, called Guangxi Guangyi Medicine Co Ltd, will have a total investment of 10 million yuan (US$1.2 million) and will be engaged in producing and marketing traditional Chinese medicines (TCM), said Liao. The US side will take a 51 per cent stake in the joint venture. A total of 100 million yuan (US$12.3 million) for the first phase of the exhibition centre will be injected by the end of this year, according to Liao.

"The exhibition centre is expected to become a centre of research and development, production, logistics and exhibition trade of modern and international medicines," said Liao.

In addition, the exhibition centre, with an area of 187 hectares, aims to become the largest medicine show room and industry cluster of Chinese medicine in Asia, said Liao.

Established in New York this year, Guangyi Expo Inc hopes to help TCM producers enlarge their business in the overseas markets.

Official statistics show the annual sales amount of Chinese herbal materials in the global market has exceeded US$16 billion at present.

However, China, as a TCM production centre, takes a mere share of the global market, according to Liao.

The export volume of TCM from China only accounts for 3-5 per cent of its total in the world market, according to statistics.

In addition, statistics show there are more than 100 medicine parks in China.

"As a result, the development of China's TCM industry requires a comprehensive platform that can introduce all kinds of capital, overcome location limits and integrate resources of research, science, production and trade," said Liao.

In addition, Liao said the demand for TCM in the global market will increase rapidly in the next few years as it has become widely acclaimed in the United States and European countries.

Source: China Daily