Advocates of the ingredient say it can provide a range of benefits for bone health, immunity and better sleep. Its high levels of collagen also make it suitable for anti-ageing products, he said.
But the number of donkeys in China has dropped from 11 million to three million in the past 30 years, pushing up the price of imports.
However, officials said the import tax was reduced from 5% to 2% on Monday.
Donkey meat is also a popular food in China, but campaigners say all exports to the country should be banned because it is causing shortages in Africa, where they are needed for agricultural work.
Last year we reported how one TCM firm, Dong-E E-Jiao, was attempting to appeal to export markets by harnessing the traditional ingredient in two modern products.
One was a chicken broth which claims to aid immunity, the other a mixed with sour dates and claims to improve sleep.
It has also released a supplement in capsule form where it is teamed with iron and calcium.
However, Zhou Xiangshan, the company’s vice president, alluded to ongoing domestic supply problems.
“Many of our consumers pay close attention to the price hike of the raw material. Three years ago donkey hide gelatin cost RMB70 a kilo, now it is RMB500.
“This is because we have fewer donkeys. In the 1970s you saw them on the streets, now they are rare,” he said.