Shandong Launches Global Traditional Chinese Medicine 'Dual Centers' to Establish International Quality Standards and a Digitalized Global Distribution System

500 kg of Ejiao cubes, totaling RMB 1.1 million: Dong’e County, the “Home of Ejiao in China,” received a special order. This first transaction, bearing serial number 2020102400000001, has become an important milestone in the digitalization of traditional Chinese medicine (TCM), ushering in an era of standardized and digital trading of Chinese herbal medicines.

On October 24, the Second World Conference on Traditional Chinese Medicine (TCM) Internet Industry opened in Jinan, the hometown of Bian Que. Top experts, scholars, and industry representatives from various sectors of the global TCM “industry-academia-research-application” ecosystem gathered to witness the establishment of multiple innovative TCM industry projects. Ma Jianzhong, President of the World Federation of Chinese Medicine Societies, and Sun Licheng, Member of the Standing Committee of the Shandong Provincial Party Committee and Secretary of the Jinan Municipal Party Committee, unveiled the plaques for the World Chinese Medicinal Materials Internet Trading Center (hereinafter referred to as the “Trading Center”) and the World Chinese Medicinal Materials Quality Inspection Center (hereinafter referred to as the “Inspection Center”).

Ma Jianzhong, President of the World Federation of Chinese Medicine Societies, and Sun Licheng, Member of the Standing Committee of the Shandong Provincial Party Committee and Secretary of the Jinan Municipal Party Committee, jointly unveiled the plaques for the World Traditional Chinese Medicine (Materials) Internet Trading Center and the World Traditional Chinese Medicine (Materials) Quality Inspection Center.

The completion of the trading center’s inaugural transaction signifies the establishment and operational launch of a digital trading and quality inspection system for traditional Chinese medicinal (TCM) materials, covering the entire industrial chain. The trading center has also become the first institution in China to establish a digital circulation platform for TCM (materials) featuring “uniform standards, full-process traceability, and commercial insurance-backed quality assurance.” It will develop premium TCM brands and price indices with global reach, marking a new phase in the modernization and internationalization of the TCM materials industry.

The establishment of the “Dual Centers” has built a full-chain digital service system for traditional Chinese medicine (TCM) materials. By integrating the flows of goods, logistics, capital, and information, it achieves end-to-end integration of quality control, trading, payment, settlement, and regulation. This effectively addresses long-standing challenges hindering the development of TCM, such as the difficulty in unifying quality standards, fragmented trading markets, price valuation complexities, and difficulties in circulation traceability.

In China, specialized markets for traditional Chinese medicinal (TCM) materials coexist with numerous production-area markets and agricultural trade markets. Standardizing the TCM material market has become the primary challenge constraining industry development. Although the emergence of electronic trading platforms in recent years has improved aspects such as shortening transaction chains, persistent issues—such as the lack of cross-regional mutual recognition of quality standards, inability to guarantee quality, and absence of authoritative price reference indices—remain effectively unresolved.

“The Dual Centers” have established an international quality standard system for Chinese herbal medicines, deeply cultivating a standardized, intensive, large-scale, and traceable global distribution system to promote the transformation, upgrading, quality improvement, and efficiency enhancement of the Chinese herbal medicine industry. “The formulation and refinement of international standards for Traditional Chinese Medicine (TCM) across the entire industrial chain, along with a world-class modernized circulation system for TCM, are critical conditions for further advancing the high-quality development of the TCM industry,” stated Zhang Boli, Vice President of the World Federation of Chinese Medicine Societies and Academician of the Chinese Academy of Engineering, in his address at the conference.

From sourcing suppliers and placing orders to merchant confirmation of shipment, a single transaction can be completed in just a few minutes. Without the need to travel to regions of origin for meticulous selection, buyers can one-stop purchase high-quality, cost-effective Chinese herbal medicines. The significant improvement in transaction efficiency is underpinned by a comprehensive quality control and service system. Taking herbal materials as the starting point for quality control, the trading center covers varieties such as Traditional Chinese Medicine (TCM) decoction pieces and TCM formula granules. By establishing seven major systems—TCM quality standards, quality identification, full-process traceability, quality insurance, internet-based trading, TCM innovation, and international exchange—it brings transformative changes to the TCM industry, government regulation, manufacturing and operating enterprises, and patients.

On the day of the unveiling ceremony, the Trading Center signed an agreement with Zhenbaodao Pharmaceutical to jointly establish the Bozhou Base of the Trading Center in Bozhou, Anhui—the largest distribution hub for traditional Chinese medicinal (TCM) materials in China. This initiative aims to further enhance the supply guarantee capabilities of the Trading Center and its platform for TCM materials. Zhenbaodao will open up its upstream and downstream supply chain resources, enabling more than 2,000 merchants to join the Internet trading platform of the TCM (Materials) Alliance operated by the Trading Center.

Liao Jieyuan, Chairman of Shandong Internet Medical Insurance and Big Health Group, stated that the trading center supports participation by all upstream and downstream supply and demand parties in platform-based transactions. It promotes the migration of online trading for the full spectrum of traditional Chinese medicine (TCM) products—including raw herbs, decoction pieces, and formula granules—from offline to online channels. Furthermore, it establishes a fully closed-loop quality control and service system spanning “from the field to the stomach.” This digitalized TCM distribution system will render the entire supply chain more agile, efficient, and intelligent.

As the operator responsible for the center’s construction and operations, Shandong Internet Medical Insurance and Health Group was jointly promoted and established by the Shandong Provincial Healthcare Security Administration and the Jinan Municipal People’s Government. Its inaugural operational project, the Shandong Provincial Internet Medical Insurance and Health Service Platform, went live on April 25 this year, pioneering an integrated healthcare security service system encompassing “Internet + medical insurance + medical care + pharmaceuticals.” The Bianque Smart Traditional Chinese Medicine (TCM) Pharmacy, which utilizes an unmanned intelligent herbal decoction system, was showcased as a demonstration project at this conference and signed agreements with multiple prefecture-level cities.

Sun Jiye, Vice Governor of Shandong Province, stated in his address that Shandong would seize the opportunity presented by the World Conference on Internet Industry of Traditional Chinese Medicine to vigorously support the integrated development of production, supply, and marketing of Chinese herbal medicines. The province will focus on strengthening two pioneering initiatives: establishing an international online trading platform for Chinese herbal medicines and forming a cross-provincial procurement alliance for Chinese herbal medicines. These efforts aim to promote the development of the traditional Chinese medicine industry and continuously enhance the public’s sense of gain, happiness, and security.