Winter is Coming! This line of the Game of Thrones well-known in the world may be used to best describe the current situation of the Chinese API industry.

The API industry was pride of the pharmaceutical industry of China, the world’s biggest exporter of APIs and second largest producer of APIs, but it seems to become a rat crossing the street obnoxious to everyone. Production suspension! Production reduction! Anti-monopoly! Relocation boom! Those hot words that frequently appeared in 2017 undoubtedly show that the Chinese API industry is in the awkward winter. In my opinion, the principal contradiction in the Chinese API industry is the contradiction between environmental protection and prices, and whether the DMF system that was just released at the end of 2017 could completely solve this contradiction is still unknown. Here, starting from this principal contradiction, I’d like to review the big events of the Chinese API industry in 2017, and discuss with you regarding the future directions of the Chinese API industry behind those events.
Environmental protection VS prices
The contradiction between environmental protection and prices has been the principal contradiction of the API industry, and for a long time, it seems to be a problem of "fish and bear’s paw": to achieve environmental protection, the production reduction of the API manufacturers will undoubtedly result in the rise in API prices; to achieve good prices, the operation of a large number of API manufacturers will also undoubtedly lead to environment pollution.
Environmental protection—strictest in the history of China
January: Zhejiang Province issued and started to implement the Emission standard of air pollutants for chemical synthetic pharmaceutical production, which is the first local standard for the air pollutants for chemical synthetic pharmaceutical production in China.
March: the Ministry of Environmental Protection, Ministry of Finance, National Energy Administration, and the People’s Governments of Beijing, Tianjin, Hebei Province, Shanxi Province, Shandong Province and Henan Province introduced 2017 Plan on Air Pollution Prevention and Control in Beijing, Tianjin, Hebei and Surrounding Regions, requiring all the pharmaceutical and pesticide enterprises in "2+26" cities to suspend production in the winter heating season, covering Tianjin, Beijing, Shijiazhuang, Jinan, Zhengzhou, and Taiyuan, etc.
November: the Ministry of Industry and Information Technology and Ministry of Environmental Protection of China, etc. jointly issued a notice requiring API enterprises in 28 cities to suspend production in turn and all those involving VOCs emission procedure to suspend production in the heating season (November 15, 2017 to March 15, 2018), and also requiring the health and family planning department of each place to make suggestions for supply guarantee of API varieties that shall be implemented off-peak production in principle as specified, by taking into account monitoring results of pharmaceutical products in short supply, varieties of national essential drugs of China, pharmaceutical products for first-aid (rescue), and other pharmaceutical products that are clinically required or easily in short supply, etc.
December: the famous pharmaceutical enterprise North China Pharmaceutical was filed a case and punished due to violation of the Law on the Prevention and Control of Atmospheric Pollution.
December: 10 authorities including the Ministry of Environmental Protection and the National Development and Reform Commission (NDRC) of China in association with governments of Beijing, Hebei and other 4 provinces (municipalities) issued the Priority Action Plan for Comprehensive Management of Air Pollution during Autumn and Winter of 2017-2018 in Beijing-Tianjin-Hebei and Surrounding Regions to specially emphasize that pharmaceutical enterprises involving API production will be stopped production in principle if they violate the emission procedure.
December: the State Council o...










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