During the past two decades, China has seen her great progress in plant biotechnology. Since the Chinese market of herb medicine is huge, while the plant resources are shrinking, particular emphasis has been placed in plant tissue and cell cultures of medicinal plants, this includes fast propagation, protoplast isolation and regeneration, cell suspension cultures and large scale fermentation. To optimize culture conditions for producing secondary compounds in vitro, various media, additives and elicitors have been tested. Successful examples of large scale culture for the secondary metabolite biosynthesis are quite limited : Lithospermum ery throrhizon and Arnebia euchroma for shikonin derivatives, Panax ginseng, P. notoginseng, P. quinquefolium for saponins, and a few other medicinal plants. Recent development of genetic transformation systems of plant cells offered a new approach to in vitro production of secondary compounds. Hairy root induction and cultures, by using Ri-plasmid, have been reported from a number of medicinal plant species, such as Artemisia annua that produces little artemisinin in normal cultured cells, and from Glycyrrhiza uralensis. In the coming five years, Chinese scientists will continue their work on large scale cell cultures of a few of selected plant species, including Taxus spp. and A. annua, for the production of secondary metabolites with medicinal interests, one or two groups of scientists will be engaged in molecular cloning of the key enzymes in plant secondary metabolism.