While the number of ingredients and professionalism of the sector is improving, grassroots facilities available to patients are still not up to scratch.
A report released by the State Administration of TCM revealed that Chinese researchers discovered 54 new plant species for TCM last year.
The report added there were now 13,000 types of medicinal herbs in the wild and 736 cultivated herbs nationwide.
The numbers come on the back of concerted efforts to better classify and monitor TCM resources.
China began its fourth pilot programme for the national survey of TCM resources in 2011.
By the end of last year, the project had covered had covered 1,332 counties in 31 province-level regions across the country, representing around half of the country's administrative divisions at the county level.
China also established more than 200 seedling nurseries for growing TCM herbs between 2012 and 2015.
"Standards should be set to regulate the exploitation, planting and quality control of TCM herbs to fully use and protect the resources," said Huang Luqi, deputy head of the China Academy of Chinese Medical Science.
Healthy China policy
The Chinese authorities are also pressing ahead with plans for more TCM clinics and hospitals under President Xi Jinping's Healthy China (HC 2030) blueprint.
The newly published data also showed that by last September, 20.4 million patients had been discharged from TCM hospitals in 2017, accounting for 15% of all discharged patients in the country.
The administration said 67% of town-level and community health centres had TCM units, totalling over 30,000, while there are 45,800 dedicated TCM clinics across China.
However, Wang Guoqiang, head of the administration, said TCM services were still unbalanced and relatively weak at the grassroots level.
"The needs of the public for TCM cannot yet be met," Wang said.
He added that the administration planned to support medical institutions that specialise in TCM, and build at least one public TCM hospital in each county.
The HC 2030 document made TCM development a national strategy, with the aim of "building a medical and healthcare system with Chinese characteristics…thus ushering in a new era of development for TCM".
It aims to make TCM development accessible to everyone, ensure equal attention is devoted to both TCM and Western medicine, and ensure both disciplines complement each other.