(Yicai Global) Aug. 17 -- Qin Yufeng, president of Shandong Dong-E-E-Jiao Co. [SHE:000423], recently invited over 150 experts from the donkey industry to visit China to set up an international industrial alliance for technological innovation and look into development of the sector.

Qin also put up USD10 million to start an innovation fund as he looks to make his mark on the industry.

Gelatin from donkey hide, a major Dong-E-E-Jiao product, is used in traditional Chinese medicines. The gelatin is produced from boiling the skin and is used as a tonic for sex, beauty or longevity.

"This innovation fund aims to back global research for the protection of donkeys, breeding and rearing, disease prevention and product development," Qin said.

"Current resources in China are unable to meet our demands. We need to invest more and attract global attention within the industry in a bid to drive up China's donkey-hide gelatin business," he added.

The sector was worth CNY78 billion (USD11.7 billion) in China last year, industry data shows. The figure is forecast to reach CNY100 billion in 2020. However, the number of China's donkeys has decreased from 11 million in the 1990s to less than six million, and is falling at an annual rate of 3 percent.

The shortage is leading to a rising price for donkey hides in China, which now cost around CNY3,000 (USD448) each.