Te survey expects the size of China's pharmaceuticals market to treble to over $24 billion by 2010.

The market for innovative ethical or prescription drugs and differentiated over-the-counter products held out the greatest promise, the survey said.

China's ethical drug market, which stood at $5.8 billion in 2000, was expected to climb to $19 billion by 2010.

To establish a foothold, Indian companies should assemble and prioritise a portfolio of patented and OTC products tailored uniquely for the Chinese market, the survey said.

"In China, therapeutic drugs are likely to experience the highest growth. Thus, Indian companies should focus on drugs for heart diseases, depression and diabetes," the survey added.

The survey said several powerful forces would converge to transform China's competitive landscape over the next decade.

As the Chinese economy modernises, the demand for advanced healthcare will increase and with it the expenditure on healthcare.

The population would move beyond basic anti-infective treatments, common in China today, to drugs that would improve the quality of their lives, the survey added.

China's entry into the World Trade Organisation (WTO) is expected to bring its pharmaceuticals sector in line with world standards in the next five years.

Under the WTO, China will have to enforce foreign and international patents in accordance with the agreement on trade related intellectual property rights (TRIPS).

China will also have to reduce tariffs on pharmaceuticals imports from an average of 9.6 per cent today to 4.2 per cent by 2004.