Investing in alternative treatments

Chinese investors are betting big on sham or alternative medication companies:

Chinese people also are increasingly turning away from hospitals and doctors to pharmacies for minor coughs and colds, fueling a booming market in over-the-counter medicines. The market for those drugs grew 11% in 2005 to around 50 billion yuan, according to the London market-research firm Euromonitor International. Nearly 80% of Tong Ren Tang’s products are sold directly to consumers at pharmacies across China.

“The growth prospects for the company are sound, as we believe domestic consumption will become the key economic driver for China over the next few years,” says Martin Lau, director of greater China equities at First State Investments in Hong Kong.