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During diplomatic visits like that of Stephen Harper to China recently, what is not said publicly is as important - if not more so - than what is said.

A case in point: drugs.

You can be sure that while Mr. Harper was posing for photos at the Great Wall and communiqués were being issued about the loosening of rules to allow more Chinese tourists to visit Canada, behind closed doors there were high-level talks talking place about the two countries' pharmaceutical industries.

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China has, by far, the fastest-growing pharmaceutical industry in the world. It produces vast amounts of traditional Chinese medicine as well as Western-style medications, both for domestic consumption and export.

Canada - which has the eighth-largest pharmaceutical industry in the world - has a lot of expertise and capital to offer, things that China desperately needs as its drug industry lacks investment, innovative capacity and lucrative proprietary products.

Canadians are also, per capita, among the biggest consumers of traditional Chinese medicine, making this country a key export market.

This presents huge business opportunities for both countries. However, there are some equally enormous public-policy challenges that go hand in hand that should be debated before the Prime Minister returns to sign bilateral agreements.

Regulatory standards in China remain lax over all, and the system is plagued by corruption. While regulatory oversight has improved markedly in the wake of some embarrassing scandals involving tainted pet food and toothpaste, much work remains to be done.

To state the case undiplomatically: China is the source of a lot of counterfeit drugs and products of dubious effectiveness and safety - some of which are downright dangerous.

So what should be done to keep Canadians safe? In a word: co-operation.

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That's what Catherine Côté concludes in a fascinating new research paper commissioned by the Canadian International Council.

In the paper, titled Ensuring Canadians Safe Access to Pharmaceutical Products through Canada-China Co-operation, she argues that Canada cannot possibly protect its citizens with the current system of product review and attempts to stem Internet purchases.

Ms. Côté takes the position that Canada has made a tactical mistake by viewing the expansion of China's pharmaceutical industry as a threat to the domestic industry rather than an opportunity - and not just an opportunity to make money, but to improve standards.

The researcher makes a strong case for Health Canada to work closely with China's State Food and Drug Administration to ensure compliance with good manufacturing practices and stronger regulatory oversight within China.

This is no small task: The paper notes there are a mind-boggling 2,692 drug regulatory departments in China. While the institutions are numerous, their roles and powers are ill-defined. Corruption remains a huge impediment to safety as well. "It is not uncommon for manufacturers to offer bribes in exchange for a good inspection report," Ms. Côté notes.

Under the circumstances, it may be tempting simply to wash our hands of the matter and crack down on bogus and unsafe products once they arrive at the Canadian border.

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But, as the research points out, the Chinese market environment is "distinctly attractive" to large pharmaceutical companies. Wages are low, there is an abundance of people willing to participate in clinical trials and there are huge subsidies available for joint ventures. So, an increasing number of drugs will be coming out of the country in the years to come. (In fact, by 2050, China is expected to supplant the United States as the world's biggest producer of prescription drugs.)

At the same time, a parallel industry of counterfeiters is springing up and taking advantage of poor regulation and lack of enforcement to engage in all sorts of semi-legal, semi-ethical practices.

The report states that, even in highly regulated environments such as the United States and Canada, between 1 and 5 per cent of prescription drugs are bogus. "Counterfeiters' methods are so sophisticated that even legitimate producers now have difficulty separating the real drug from the fake without conducting tests," Ms. Côté writes.

The problem is even more widespread when it comes to complementary medicines, such as herbal weight-loss concoctions, which are less strictly regulated. There are at least 40,000 natural health products sold in Canada, a goodly portion of them manufactured in China.

While Canada has introduced measures to deal with substandard, dangerous products - the Natural Health Products Regulations and the Canadian Consumer Product Safety Act - the only way to stem the tide of dubious products is to do it at the source.

"Without a strong commitment from their government to ensure pharmaceutical products' safety and quality, Canadians are at risk of consuming products that are detrimental to their health and that of others," Ms. Côté concludes. "Yet, there can only be significant improvements if the Canadian and Chinese governments work closely together."

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