Abstract: To address the critical need for the high-quality transformation of the southern medicinal herbs (Nanyao) industry in Guangdong Province, this study systematically reviews its development status, analyzes the underlying causes of its key problems, and forecasts high-quality development pathways for the "15th Five-Year Plan" period. Based on literature research, policy analysis and survey data from the Guangdong Province modern agricultural industry technology system innovation team (Nanyao) for Southern medicinal materials, and using a combination of quantitative and qualitative methods, the study analyzes the current situation from four dimensions—germplasm resources, type structure and scale, industrial clusters and regional distribution, and the entire industrial chain and brands—and, for the first time, conducts a dedicated analysis of the industrial chain structure, value transmission, market supply-demand and competition. The results show that Guangdong possesses solid resources, with 4 692 medicinal resource species and a Nanyao cultivation area of about 280 000 hm², and has formed an integrated industrial chain across the primary, secondary and tertiary sectors. However, value transmission is characterized by "strong in the middle and weak at both ends", with the processing sector capturing most of the value and the agricultural end holding weak bargaining power; combined with the competition of medicinal materials and the "non-grain" policy constraints on cultivated land, the industry still faces structural constraints in germplasm protection, standardized cultivation, regional layout and tri-industry integration. The roots of these problems lie not in a single cost factor, but in the friction between smallholder operation and modern standardization systems, the mismatch between market price signals and zoning guidance, and the imbalance of the value-distribution mechanism along the chain. For the "15th Five-Year Plan", it is suggested to work synergistically along six dimensions—scientific planning and layout, seed industry revitalization, ecological planting transformation, Good Agricultural Practice (GAP) for Chinese Herbal Medicines standardization, tri-industry integration and brand clustering—to accelerate the construction of a more resilient and competitive modern Nanyao industry system and provide a "Guangdong Paradigm" for the high-quality development of Chinese medicinal materials nationwide.