Here's a decent article, reprinted on an acupuncture website, but written by a ethicist on the subject of the invalid scientific basis for Chinese medicine, with some fair rebuttals to the claims.
Probably a good general overview of why the field is unethical, with some fair responses from someone who disagrees
Scientific Criticism of Traditional Oriental Medicine: Reflections Following Conversations With My Twin Brother
Note that
Dr. Fratkin's article first appeared in the Winter 2000 issue (Vol. 2, No. 1) of the California Journal of Oriental Medicine.
What it boils down to is that Chinese traditional therapies aren't medicine at all. They're a religious belief system. Its faith healing. Is it ethical for faith healers to peddle their art? To prey on the weak, take their donation dollary doos and then fail to provide them with an effective treatment for their ailment? Absolutely not. It is fraud, and fraud is unethical behavior by definition.
Chinese traditional medicines are the Eastern version of Homeopathy, which is pseudo science and quackery.
Here's another good series of discussions on the ethics of naturopathic style "medicines".
Note that there's 5 parts to that series.
Science, Reason, Ethics, and Modern Medicine Part 1: Tu Quoque and History Science-Based Medicine
Here's an academic work examining traditional chinese herbal remedies for irritable bowel syndrome
Chinese herbal formulations individually tailored to the patient proved no more effective than standard CHM treatment. On follow-up 14 weeks after completion of treatment, only the individualized CHM treatment group maintained improvement.
and while they did help relieve symptoms somewhat for some patients (placebo effect) the reality is that
To date, no strong scientific evidence available supports the use of Chinese herbal agents in IBS.8 However, CHM has been used for centuries in the treatment of functional bowel disorders and is routinely used for this purpose in China. Several Chinese studies have suggested the potential effectiveness of CHM for treatment of IBS, although these have all lacked rigor in clinical trial protocol9- 13 and have had poor randomization techniques and lack of blinding.8
JAMA Network | JAMA | Treatment of Irritable Bowel Syndrome With Chinese Herbal Medicine: ?*A Randomized Controlled Trial
The reality is that "Traditional Chinese medicine" probably works no better than a placebo in the vast majority of cases. There might be some functional compounds to be derived from these herbal remedies, that might be effective in large enough doses, but that wouldn't be traditional chinese medicine anymore. That would be Western medicine doing what its been doing for a long ass time, which is taking these claims, testing them, throwing out the vast majority of them as hogwash, and validating the few lucky strikes these traditional voodoo witch craft cures have run across.
And the World Health Organization has been gradually developing a strategy to deal ethically with Traditional Medicine practices around the globe, in answer to your question of "who determines the ethics of it"
WHO | WHO traditional medicine strategy
Really, all this "Chinese traditional medicine" bollocks can just be wrapped up under the rubrick of "Alternative therapies" which are pretty much across the board quackery and fraud. Without some process to determine what works and what doesn't, alternative therapies are by definition unethical to peddle.
The ethics of alternative medicine therapies. - PubMed - NCBI
All you have to do to resolve these question is ask yourself this question
Is there a regulatory process that oversees the practice and ensures that the "cures" that are peddled are actually "curing" people of the conditions they claim to the majority of the time without harming the patient in some way?
IF the answer to that question is "No", then guess what? Its quackery and unethical to peddle it.
The fact that the FDA lets untested supplements be sold, these fish oil pellets and other nonsense, is as unethical as just about anything I can think of. The Vani Haris and Dr Ozs and Long Duck Dong's of the planet peddling rhino horn supplements and detox programs and all that shit are, by definition, unethical snake oil peddling fraudulent con artists of the absolute utmost higher order.
I wanted to point out that you have a very ethnocentric view of ethics. Which is something I believe goes against the tenets of anthropology.
When it comes to people's health, and the complete lack of accountability in traditional medical therapies, you better be damn sure I'm demanding the scientific process be followed. Nothing ethnocentric about it. The scientific process is not a "Western" owned thing. All humans have been engaging in systematic rational inquiry since the first ancestor shaped the first stone tool. Westerners don't own the scientific process, and it has been shaped by cultures all across the world, from the Chinese to the Hindis, to the Arabs, to the Europeans.
Nothing "ethnocentric" about it.
Plus I'm not an ethnographer, and we're not doing ethnography, so I have no responsibility to have a mind so open on this issue that my brain falls out. I'm not conducting a scientific inquiry into the validity of Eastern medicine, if I were then your line of thinking here might be a valid complaint, but if I were engaging in that activity, there would be a proper scientific process applied, including double blind peer review controlled studies, and I would employ cultural relativism in that regards would be warranted.
You misunderstand what "ethnocentrism" versus "cultural relativism" implies in Anthropology.
I have no responsibility to, for instance, accept Bachi Bazi practices as morally good. I can make a judgement call that selling little boys as sex slaves is fucking
wrong. I'm not in Afghanistan conducting ethnographic research on the subject, I have no responsibility to have an open mind about the practice because of that fact.