This paper investigates the factors that drive the demand for medicine in China from three aspects：population，budget constraints and policy background.The prompt expansion of Chinese medicine market in this century can be attributed to the aging of population，the growth of residents’ income and the implementation of healthcare system.Up to 2020，the demand for medicine will continue to expand. The reasons are threefold：the aggravation of the aging population problem，a high growth rate of residents’ income due to economic development，as well as an increasing amount of public finance invested in medical career. In 2020，the scale of China’s drag market will exceed two thousand billions，and that of traditional Chinese medicine market will probably surpass 900 billions.