China Chamber of Commerce for Import and Export of Medicines and Health Products: China's API exports in 2019

Exports hit a new high

In 2019, my country's API exports reached 10 million tons, up 8.83% year-on-year. The average export price rose by 3% year-on-year, showing a good trend of rising both volume and price.

From the perspective of sub-categories, most API exports have achieved varying degrees of growth. The export value of anti-infective APIs doubled year-on-year, including antiviral and anti-tuberculosis APIs, which have seen significant growth in exports; the export value of hormone APIs increased significantly by 78% year-on-year, mainly driven by a 76% year-on-year increase in export volume, with estrogen and progesterone exports increasing by 200%; antipyretic and analgesic, amino acid, tetracycline, cephalosporin, lincomycin and other bulk APIs continued their two-year export growth momentum, achieving an export growth rate of more than 8% in 2019, including paracetamol, ibuprofen, The export volume of major varieties such as ceftriaxone has increased; the export of bulk APIs such as vitamins, penicillins, macrolides, and chloramphenicol has shown varying degrees of negative growth, mainly due to the decline in export prices. Among them, the export prices of major vitamin varieties such as vitamin A, vitamin C, vitamin E, and vitamin B1 have all fallen after experiencing a sharp increase in the previous year, and the export volume of major penicillin varieties such as amoxicillin trihydrate and 6-APA has also decreased; in 2019, my country's exports of anti-cancer APIs reached nearly US$100 million.

Market remains stable

In 2019, my country exported APIs to 189 countries and regions. The main exports were concentrated in Asia, Europe, and North America, which together accounted for 89% of my country's total API exports.

The API exports to the Asian market reached 5.4461 million tons, with a value of US$15.917 billion, a year-on-year increase of 15.56%. The proportion of quantity and amount increased by about 1.5 percentage points compared with the previous year. India is the largest destination for my country's API exports. 70% of its APIs come from China, and the proportion of intermediates is even higher. Although the Indian government has vigorously supported "Made in India" in recent years, API parks have been built in various parts of India, and many Indian pharmaceutical companies have also moved upstream, it is still difficult to reduce its dependence on Chinese APIs in the short term. In 2019, India imported 807,900 tons of APIs from my country, a year-on-year increase of 22.56%, with a value of US$5.653 billion, a year-on-year increase of 25.53%, accounting for nearly 17% of my total API exports, and accounting for more than 1/3 of my API exports to the Asian market. However, the APIs imported by India from China are mainly low-value-added APIs and pharmaceutical intermediates, such as anti-infectives, penicillins, cephalosporins, hormones, etc. Japan has always been ranked third in the list of destinations for China's API exports. The trade cooperation between the two sides has grown steadily, which is related to the fact that its government has been vigorously promoting generic drugs and the generally stable cooperation between Chinese and Japanese companies. In 2019, China exported 476,400 tons of APIs to Japan, a year-on-year increase of 3.03%, with a value of US$2.059 billion, a year-on-year increase of 8.24%. The main export varieties to Japan include traditional bulk APIs such as vitamins, amino acids, and antibiotics, as well as specialty APIs such as sartans, prils, and statins. More than 90% of ASEAN's APIs are met by imports, so it is also the main market for my country's API exports in Asia. In 2019, it imported US$3.305 billion of APIs into China, a year-on-year increase of 9.99%. Vietnam, Indonesia, and Thailand are the main export destinations for China's APIs in ASEAN. Low-priced traditional APIs such as antipyretics, anti-infectives, and vitamins are the main categories of APIs exported to ASEAN.

In 2019, my country exported 2.0763 million tons of APIs to Europe, with a value of US$9.461 billion, a year-on-year increase of 14.1%. The quantity and amount accounted for 20.52% and 28.09% of China's API exports, respectively, and the proportion remained basically stable. Among them, exports to the EU reached US$8.281 billion, a year-on-year increase of 12.36%. Germany, the Netherlands, Italy, and Spain are all among the top ten destinations for China's API exports. The APIs exported to the EU are mainly anti-infectives, amino acids, vitamins, tetracyclines, etc.

Affected by the Sino-US trade friction, in 2019, China exported 787,900 tons of APIs to North America, with a value of US$4.518 billion, a year-on-year decrease of 0.37%. The quantity and amount accounted for 7.79% and 13.41% of China's API exports, respectively, and the proportion decreased by about 1.5 percentage points compared with the previous year. Among them, the United States, as the second largest export destination for my country's APIs, imported US$4.215 billion of APIs from my country throughout the year, a year-on-year decrease of 1.23%. It is the only country among the top ten exporters of APIs in China that has experienced negative growth. China exported 665,400 tons of APIs to it, a year-on-year decrease of 10.99%, while the average export price increased by 10.96% year-on-year. This shows that after the United States imposed tariffs on most of its exports to the United States, although the United States realized that Chinese APIs were poorly substitutable in the US market, and therefore the tax increase list contained very few API varieties, trade frictions still inevitably had a negative impact on Sino-US API trade.

Figure. Market share of my country’s API exports in 2018 and 2019

Data source: Statistics from China Medical Insurance Chamber of Commerce

The number of enterprises has increased significantly

In 2019, there were 12,462 enterprises in my country engaged in API export business, an increase of 1,056 over the same period of the previous year. The number of enterprises has been growing for six consecutive years, and almost all of them are private enterprises. As the main force of API export in my country, private enterprises have always maintained strong export vitality. In 2019, the total API export value reached US$22.434 billion, a year-on-year increase of 15.97%, and the proportion increased to 67%; the API export value of state-owned enterprises reversed the trend of continuous decline in recent years, and the export value in 2019 was US$3.829 billion, but the year-on-year increase was only 6.12%, resulting in a continued contraction of the proportion to 11%; the year-on-year increase in the export value of foreign-invested enterprises was only in the single digits, at 4.59%, and the proportion shrank to 22%.

The top ten API exporters in my country have a cumulative export value of US$2.952 billion, accounting for 8.76%; there are 43 companies with export value exceeding US$100 million, accounting for 21.82% of the cumulative export value. As more and more companies are engaged in API export and the international market competition becomes more intense, the above two proportions have decreased compared with 2018, and the concentration of API export in my country is still relatively low. The export performance of leading export companies such as Sinopharm Group, Propharma, Livzon Group, Huahai Pharmaceutical, Zhejiang Chemical Industry, and Jiuzhou Pharmaceutical has increased significantly.

Source: China Chamber of Commerce for Import and Export of Medicines and Health Products