China’s investors, sick of ailing returns, see traditional Chinese medicine as a cure
- Common ingredients used in TCM have seen their prices surge in recent years as users stockpile supplies and available farmland grows scarce
Frustrated by a battered stock market and a housing bubble that has gone from boom to bust, some Chinese investors are looking to root their money in a more traditional sector: medicinal herbs.
The Kangmei TCM material price index, a barometer of the country’s medicinal herb market since receiving government approval in 2012, has reflected substantial gains since the summer of 2020, climbing by nearly 75 per cent in the past four years.
The index for Atractylodes macrocephala, a flowering plant whose roots are used to treat digestive problems, grew threefold over that same period. And for coltsfoot, whose flowers are a common remedy for respiratory conditions, it surged even more.
Guo Tingli, a medicinal herb retailer in Bozhou, Anhui province, where China’s largest trading market of TCM materials is located, said the price for 1kg (2.2 pounds) of coltsfoot was about 100 yuan (US$14) two years ago, but now it runs around 400 yuan.
“One reason is that some people have been hoarding supplies,” he said. “It began after the coronavirus pandemic ended, especially as the property market turned bad.”
Zhou Zongsheng, deputy secretary general of the Sichuan TCM Promotion Association, agreed that hot money played an important role in price hikes.