The Innovative Combination of Hong Kong’s Brand Strength and the Mainland’s Advanced Manufacturing Technology in Developing the Greater Bay Area as a Centre of High-quality Proprietary Chinese Medicine

by Dr Victor Zheng* & Prof. Anthony Y. H. Fung*


Although Hong Kong’s proprietary Chinese medicine (PCM) is well received in Mainland China (the Mainland) and global markets, Hong Kong’s limited manufacturing capacity is hampering the development of the industry. Furthermore, the intermediary role between the Mainland and the rest of the world, which was historically played by Hong Kong, is diminishing, given deepening economic reforms in the Mainland. Meanwhile, competition from other countries in PCM is fierce in the two markets, threatening the Mainland’s Chinese medicine (CM) industry. In response to the limitations of each place and to broader market threats, a brand-oriented manufacturing approach based on the complementary strengths of Hong Kong and the Mainland is called for.

This study examines the potential for Hong Kong’s strong brand to be an engine for economic and industrial development, and its relevance to the creation of a PCM centre in the Greater Bay Area (GBA). It explores the innovative combination of Hong Kong and GBA cities in developing CM, with the aim of opening up new directions for the CM industry in the Mainland and creating a new manufacturing role for Hong Kong. In-depth qualitative interviews were conducted for this study and brand strengths (Hong Kong itself and Chinese medicine) were used as the analytical framework. The in-depth interviews were with senior professionals in the CM industry, and the contents of the interviews can be divided into five categories:

●	How do the positions and policies of the government influence the development of the CM industry?
●	Evaluate the impact of policies and policy gaps, discuss the reasons for dissatisfactory results, and make recommendations on policy revisions;
●	What advantages for the CM Industry have been created by the Hong Kong brand?
●	How should Hong Kong strategically expand the Mainland market?
●	How should Hong Kong and the Mainland carry out brand-led cooperation based on complementary advantages?

The research shows that the government’s current practices in managing the CM industry have not caught up with the industry’s development. Problems were found in such areas as the governance team, the accreditation system, funding amounts, and registration speed. Although a few departments have been established to handle CM-related matters, the coordination between departments is insufficient. Also, the accreditation system has not taken into consideration the actual industry environment, which puts small-and medium-sized Chinese medicine dealers at a disadvantage. Inadequate amounts of funding and inefficient registration speeds have also hindered the development of the industry.

The government needs to strike a balance between maintaining regulations and pioneering the development of the CM industry. Based on the research findings, the research team proposed the following policy recommendations:

●	Enhance support for the CM industry by repositioning its role in the development of Chinese medicine and managing the CM industry based on the principles of Chinese medicine. Allow flexibility in regulations in order to sustain the development of the CM industry. Increasing the amount of subsidies and enlarging the scope of subsidies could also improve the quality of medicines, thus effectively benefitting the industry.
●	Facilitate the accreditation system for Chinese medicines between Hong Kong and the Mainland. Provide assistance to the industry to clarify details of the process of registering medicines for external use in Guangdong Province, and in this way help the industry to expand the Mainland market.
●	Explore an innovative combination of Hong Kong’s brand strengths with the Mainland’s technology and resources, with a specific focus on PCM manufacturing, by leveraging Hong Kong’s branding to consumers. This would ensure an important role for Hong Kong in the modernization and internationalization of the CM industry, as would the set up of a CM blockchain platform and an herbal CM exchange centre, help in the development of a new mode of collaboration for Hong Kong and the Mainland in the global economy.

In conclusion, in this study the current development of the CM industry in Hong Kong and Mainland China was examined, the constraints on the industry and ways of improving it were analyzed, and corresponding policy recommendations were put forward. ■