In March and April 2016, the Chinese government announced a new regulatory system for certain products imported into the country using cross-border e-commerce.
For now, however, such supplements and functional foods can still bypass this system. According to a Ministry of Commerce spokesman, its official date of implementation has been postponed to January 1 2018.
Global co-head of CMS Life Sciences Sector Group and managing partner at CMS Beijing, Nick Beckett, said firms should brace themselves for tougher labelling rules: “Labelling is likely to be strictly regulated in the new regime. Labels that lack sufficient information in Chinese may mislead Chinese consumers in terms of ingredients, intake method, and storage.
“It is possible that the new regime may require products imported by cross-border e-commerce to follow the current labelling rules for food imported the traditional way.”
Healthy business, healthy consumers?
Apart from adhering to more stringent labelling rules, foreign supplement and functional food firms must anticipate their sales being affected by the new system.
China’s free-trade zone model has benefited companies that export to the country by e-commerce, leading to a sales boom for overseas firms in the supplement and functional food sectors in recent years.
The free-trade zone model, also known as the “bonded area model”, is the most commonly used model in cross-border e-commerce activities. It allows products to be imported into China and stored in a bonded area before being dispatched to customers.
Beckett said, “The loose policies do improve the efficiency of business, and benefit economic development, as the registration process for health food is complicated and time-consuming.
“However, Chinese authorities are also keen to ensure the safety of health foods; the risk of unapproved health foods with inadequate labels damaging the health of the consumer is high.”
Still, he added that bypassing registration requirements does not mean bypassing general food safety regulations.
Any company that imports unsafe food into China through cross-border e-commerce is subjected to the liabilities dictated by the current regulatory system.
Working out the details
With the new regulatory regime yet to be enforced, the Ministry of Commerce has said it is cooperating with relevant authorities to fully develop it.
Beckett said, “Although details of the new regime are unclear, the general principles have been stated: the obligations of e-commerce enterprises will be strengthened, quality and safety risk control will be emphasised, a response regime for emergencies will be established, and highly risky products will be strictly regulated.”
He believes it is likely that the registration requirement for special food types — such as health food and infant food — as defined by the system will be retained, “either in the same form as a simplified version”.
Despite the limited information on the new regulations, he predicted that domestic e-commerce platform operators will bear “greater responsibilities” under the new regime, such as choosing qualified overseas manufacturers and ensuring quality control of imported products.