UK pharmacy-led health and beauty group Alliance Boots plc has formed a 50:50 joint-venture with Hong Kong-listed Guangzhou Pharmaceuticals to explore opportunities in the fast-growing Chinese healthcare market.

Rapid economic growth in China underpins rising levels of healthcare expenditure.  Currently the ninth largest pharmaceutical market in the world, the Chinese mainland is expected to be sixth largest by 2010.

Guangzhou Pharmaceutical (GP Corp) is the third largest pharmaceutical wholesaler in China, and the leader in its home province of Guangdong where it has a market share of 16 per cent, operates eight depots and employs around 2,000 workers. After completion of the joint-venture transaction, GP Corp will operate 29 retail pharmacies, the maximum allowed under current regulations for 50:50 foreign-invested joint ventures.

Alliance Boots Chief Executive Richard Baker said the deal underlined the company's commitment to be a major international player in player in pharmacy-led health and beauty.

"The Chinese market has good growth potential and this move demonstrates our belief in the ability of the group to drive growth through developing opportunities in new markets."

Chairman of Guangzhou Pharmaceutical Yang Rongming said his company was delighted to form this joint-venture with an international partner with proven excellence in the operation, acquisition and integration of pharmaceutical businesses.

Guangzhou Pharmaceutical Company Ltd ,a state-owned enterprise under the Guangzhou municipal government, listed H shares on the Hong Kong Stock Exchange in 1997, and A shares listed on the Shanghai Stock Exchange in 2001. 
 
Boots operate a retail outlet in Hong Kong though a franchise partner, and has implant operations in 52 Watsons stores there. The company also has a purchasing office based in Hong Kong.