As they enter the Chinese market, multinational firms have not only changed the industrial landscape but also nurtured a growing Chinese middle class with new products in industries ranging from investment and banking to education, entertainment and grocery stores. As an Economics Professor with Peking University, Xiao Zhuoji pointed out back in 2001, the five to ten years after China’s accession to the WTO would give rise to a strengthened consumer segment, the middle class with growing disposable income.

As a result of growing international recognition, Chinese medicine industry has become one of the fastest growing industries in the country with the global market for Chinese medicine growing at an annual rate of 18%. While facing numerous barriers, how can the industry reach its full potential?

A total of US$1 billion in venture capital was poured into China in 2005 but very little of it was invested into healthcare-related industries. While healthcare and pharmaceutical industries are among the fastest growing sectors of China’s economy, why have venture capitalists shown so little interest in these sectors?