* China launches 3-year trial to ease drug approvals

* Move to stimulate innovation, spur domestic sector

* China drug market to hit $185 billion by 2018 (Adds CFDA comment, context)

SHANGHAI, Nov 5 (Reuters) - China has launched a three-year pilot scheme to loosen approvals for new drugs, the country's food and drug regulator said on Thursday, as Beijing looks to help stimulate innovation in the country's pharmaceutical sector.

The trial, set to take place in 10 regions, will allow research and development bodies to seek drug approvals, which are currently restricted to drug manufacturers, the China Food and Drug Administration said in a statement on its website.

China's pharmaceutical market is a magnet for global drugmakers, who are now facing increasing competition from local rivals for a slice of a medicine market that is estimated by IMS Health to hit $185 billion by 2018.

The current rules make it hard for smaller, research-based firms to bring new drugs to market, as they need to invest in expensive manufacturing plants before seeking approval. Long-term, the scheme could create stronger local firms to rival global drugmakers like Pfizer Inc and AstraZeneca Plc .

China is looking to reform its over-burdened healthcare system, which is blighted by crowded hospitals, corruption and tension between patients and staff. Industry insiders, though, say reform is grinding along.

The trial, which will take place in cities such as Beijing and Shanghai as well as southern Guangdong province and wealthy Zhejiang, comes into effect from Thursday, the CFDA said.

(Reporting by Adam Jourdan; Editing by Muralikumar Anantharaman and Miral Fahmy)