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RR RUEHCN RUEHGH RUEHVC
DE RUEHGZ #0105/01 0510522
ZNR UUUUU ZZH
R 200522Z FEB 08
FM AMCONSUL GUANGZHOU
TO RUEHC/SECSTATE WASHDC 6909
INFO RUEHOO/CHINA POSTS COLLECTIVE
RUEAIIA/CIA WASHDC
RUEKJCS/DIA WASHDC
RUEAUSA/DEPT OF HHS WASHDC

UNCLAS SECTION 01 OF 02 GUANGZHOU 000105 
 
SIPDIS 
 
SIPDIS 
 
STATE FOR EAP/CM 
HHS PASS TO FIC/NIH 
 
E.O. 12958: N/A 
TAGS: TBIO ECON SOCI CH
SUBJECT: Traditional Chinese Medicine: A Major Economic, Social, and 
Cultural Influence in Guangdong 
 
¶1. (U) Summary: Traditional Chinese Medicine (TCM) has a strong 
economic, social, and cultural foothold in south China, with 
Guangdong leading the way in total TCM revenue and product output. 
"Guangdong Liang Cha", for example, an herbal tea, is becoming a 
national phenomenon and chasing Coca Cola in sales revenue in China. 
  The largest TCM hospitals are in Guangdong and the provincial 
government, with assistance from the center, is investing millions 
to strengthen and revitalize TCM health care infrastructure, both 
for the treatment of illness and the use of preventative medical 
practices.   This effort is a part of a national campaign aimed at 
cultural preservation; as importantly, it is a move to provide 
affordable medical solutions to many of those who are underserved by 
mainstream Western medicine.  End summary. 
 
TCM History: Past and Present 
----------------------------- 
 
¶2. (U) Recent archaeological findings suggest that TCM was being 
used over ten thousand years ago.  Practitioners have compiled 
compendiums of herbs for the past 2000 years, including the 
"Compendium of Materia Medica" of the Ming dynasty's LI Shizhen, the 
most complete and comprehensive collection available.  Still, with 
the advent of western medical practices, there has been a widespread 
debate about whether TCM is a legitimate healthcare practice, with 
some arguing that it is not science-based. 
 
¶3. (U) Chairman Mao was a major proponent of TCM, sending millions 
of grass-root practitioners, known as the "barefoot doctors", into 
rural areas lacking standard hospitals and medical practitioners. 
With the advent of economic reform and opening, support for this 
alternative healthcare service declined dramatically.  In 2002, the 
Chinese government took another look at the utility of TCM and by 
2007, the Ministry of Science and Technology (MOST) and the State 
Development and Reform Commission (SDRC) proposed a TCM 
modernization program as one of the major tasks in their eleventh 
5-year development plans.  The goal: to use science and technology 
to build an effective TCM medical healthcare infrastructure. 
 
TCM Regulations: A Unique Approach 
---------------------------------- 
 
¶4. (U) The Chinese State Administration of TCM (SATCM) is the 
central governing agency, under the Ministry of Health, regulating 
the TCM medical healthcare system.  Since its establishment in 1986, 
SATCM has certified TCM medical practices, standardized TCM 
nomenclatures and established procedures for enforcing TCM 
regulations.  It also directs and supports TCM research and 
technique development.  The exception to the preceding: TCM-based 
pharmaceutical products are regulated by the State Food and Drug 
Administration (SFDA).  At the provincial level, the Guangdong 
Bureaus of TCM and FDA oversee the regulation of TCM medical 
practice and TCM pharmaceutical products, respectively. 
 
TCM Industry: an Important Economic Engine in Guangdong 
------------  ----------------------------------------- 
 
¶5. (U) Guangdong produces the most TCM revenue and output. 
According to government statistics, there are over 110 TCM 
manufacturers in Guangdong.  In 2006, the total sales revenue for 
Guangdong's TCM products amounted to 9.55 billion RMB (1.36 billion 
USD), i.e., 7% of the national total and up 18% compared to 2005. 
For TCM pharmaceutical products alone, Guangdong's output was 
119,000 tons, or 13% of the national total. 
 
¶6. (U) Guangzhou Pharmaceutical Holdings Limited (GPC) is the 
provinces TCM industry leader as well as top Chinese TCM 
pharmaceutical company as measured by sale revenue.   GPC has a 
400-year history - the longest in China - of manufacturing 
"formulated" TCM products.  GPC's herbal tea beverage, "Guangdong 
Liang Cha", has become a national phenomenon in the past year and 
one analyst estimates that its sales volume will top that of Coca 
Cola in 2008.  As a point of reference, Coca Cola China had sales 
revenue of 2.8 billion Yuan (400 million USD) in 2005, was ranked at 
the top in carbonated beverage sales in China with growth of 20 
percent or so annually. 
 
Guangzhou TCM Hospital: the Front Runner in China 
----------------------  ------------------------- 
 
 
¶7. (U) Guangzhou TCM Hospital was founded in 1933, and is one the 
oldest TCM hospitals in Chinese modern history.  Size-wise, it is 
the top TCM hospital in China.  It is a comprehensive network, with 
five modern class A hospitals in Guangzhou and four mid-size 
outpatient clinics out of the city.  It has over 3000 inpatient bed 
units.  In 2006, total outpatient visits amounted to 4 million, the 
 
GUANGZHOU 00000105  002 OF 002 
 
 
highest in China for a TCM hospital.  The hospital has invested a 
significant amount (500 million RMB or 80 million USD) on instrument 
upgrades, the largest such investment by a TCM hospital in China. 
 
¶8. (U) Guangzhou TCM Hospital has an impressive list of nationally 
and internationally acclaimed TCM doctors.  The hospital recruits 
TCM experts from around the country and has a mentoring system to 
train young practitioners.  It offers over 100 TCM specialists for 
specific diseases.  The hospital recently created a new specialty 
called preventative TCM.  A whole-body scan system and individual 
health consultation, including TCM remedies, are prescribed for 
those who come for physical checkups.   The hospital specialists 
also frequently publish a TCM "soup recipe" in local newspapers. 
Cantonese have a long tradition of taking TCM through food for 
health purposes. 
 
¶9. (U) Guangzhou TCM Hospital couples TCM therapies with advanced 
clinical diagnostics.  The hospital has invested a significant 
amount of capital (500 million RMB) to upgrade its diagnostics 
capability to improve treatment.  The diagnostic division is ISO 
17025-certified and offers a range of standard tests that are 
normally seen in Western medicine hospitals. 
 
¶10. (U) Guangzhou TCM Hospital is also one of the few TCM clinics in 
China capable of conducting clinical research in compliance with 
international standards.  In the past few years, the hospital was 
commissioned by MOST under Project 863 to develop standards and 
procedures for conducting and evaluating TCM clinical trials.   The 
hospital conducts about 30 phase 1 - phase 3 clinical trials per 
year. 
 
¶11. (U) In the last year, the hospital has formed a TCM research 
institute to increase TCM basic and clinical research.  The 
institute is also funded by MOST, which awards 10 million RMB (1.43 
million USD) a year under Project 863 and 973. The hospital has 
formed multiple research collaborations with overseas researchers in 
many disease areas, including immune function, digestive disease, 
skin rejuvenation, rheumatoid arthritis, and breast cancer. 
 
¶12. (U) New TCM product development is also a key hospital activity. 
 Most notably, the hospital has an active program for the 
development of a new prophylactic anti-malaria drug which contains 
artimisinine.  Clinical trials are slated to begin in 2008 in Africa 
(Ghana and Nigeria). 
 
Guangdong's roadmap to build a better TCM healthcare system 
---------------------------- ------------------------------ 
 
¶13. (U) In accordance with the national strategy for TCM 
modernization and development, the Guangdong provincial government 
has devised a 3-year (2006-2008) plan, budgeted at 300 million RMB 
(42.8 million USD) to build a better TCM healthcare system.  35 TCM 
hospitals at the municipal and district levels will receive 2-3 
million RMB each for facility improvement; 200 TCM disease 
specialties are established throughout the province; and 500,000 TCM 
practitioners will receive one-time cash awards as part of the 
compensation package.  The goal is to make available simple and 
affordable healthcare to the largely low-income population, 
especially those from the rural area. 
 
GOLDBERG