The revisions will be made to “Regulations on Registration and Administration of Overseas Manufacturers of Imported Food”, also known as GAC Decree 248.
For example, overseas food manufacturers exporting to China may no longer need to register their production facility directly with the GACC.
This is provided that their local competent authorities are already recognised by the GACC.
These overseas authorities can submit a list of “recommended” manufacturing companies that they themselves have approved beforehand to the GACC, which will then register the overseas manufacturers and assign them with official registration numbers.
Otherwise, overseas food manufacturers will need to follow the existing procedure, which is to register their production facilities directly with the GACC or through an agent.
The GACC has proposed the revisions to address challenges arising from existing regulations and to improve efficiency.
The GACC is currently seeking public comments on the proposed revisions which ends on February 19.
China has notified the World Trade Organization (WTO) of the draft. Additionally, the United States Department of Agriculture (USDA) has provided an unofficial English translation of the draft.
According to industry observers, the above revision is expected to benefit the industry.
This is because it appears to remove the need for manufacturers to individually submit their applications to the GACC. This in turn simplifies the registration process and reduces compliance costs, particularly for companies that have obtained food safety management system recognition from their home country or region, said Subramania Bhatt, CEO and Founder of market intelligence firm China Trading Desk.
However, the actual impact will depend on execution of the regulation, according to regulatory experts David Ettinger, Jenny Li, and Sharon Tian at Keller and Heckman LLP, Shanghai.
As the proposed revision is highly dependent on cooperation agreements and system recognition, trade relation between China and individual country is set to play a crucial role.
Bhatt pointed out that some countries may enjoy a competitive advantage based on their established regulatory frameworks and stronger bilateral relationships.
Removal of health foods, coffee beans from Catalogue of high-risk foods
Another proposed revision is to remove health foods, special dietary foods, and six other types of food from the Catalogue of Foods that Require Official Recommendation Registration Letters.
There are categories of “high-risk foods” in the Catalogue, and they are subject to government-recommended registration, which often involved lengthy procedures – such as securing official inspection reports and recommendation letters issued by the local authority.
The proposed revision will see the removal of health foods, special dietary foods, unroasted coffee beans and cocoa beans, edible fats and oils.
Once removed from the Catalogue, health food manufacturers, for instance, will be able to process facility registrations by themselves.
This is believed to greatly simplify the process, leading to faster market entry and reduced compliance costs.
The food categories listed in the Catalogue could be subject to more adjustments, so that the GACC could adapt to evolving industry and regulatory conditions quickly.
“The dynamic adjustment of the high-risk food Catalogue provides GAC with greater flexibility compared to GAC Decree 248, which created a list of designed high-risk categories.
“This new approach allows GAC to adjust the list as needed in response to changing domestic and international conditions, without the need for lengthy formal regulatory amendments.
“It is possible that, in the future, global events, such as a food safety crisis in another country, may have a significant impact on the Catalogue, enabling the authority to swiftly respond by adjusting the risk levels of certain products,” he said.
The proposed amendments also demonstrate China’s commitment to optimising its food import procedures.
Exporting countries are thus expected to reciprocate with greater vigilance over food imported to China, he added.
“It seems such optimisation is to expect more cooperation from and a higher level of responsibility undertaken by the food authorities in other countries. Thus, the follow-up negotiation between a foreign country and China becomes essential,” said Ettinger.
He added that companies should approach food authorities of their respective home countries for engagement and to gain more insights whenever they can.
“For manufacturers operating their businesses in China, it is advisable to remain vigilant and adaptable in long-term planning and compliance efforts, as changes to the Catalogue may affect market access and regulatory requirements on relatively short notice,” said Ettinger, referring to plans to update the Catalogue.
Small and medium-sized enterprises (SMEs) may also struggle with limited internal resources to comply with the changing regulations, such as the list of foods in the Catalogue, which may be updated at any time, Bhatt pointed out.
“The dynamic adjustment of the high-risk food catalogue requires businesses to maintain a high degree of flexibility and adaptability.
“While this flexibility allows businesses to respond to evolving regulatory conditions, it can also increase long-term planning challenges and compliance costs, as companies will need to allocate resources to ongoing regulatory monitoring and adjustments. Nonetheless, these changes can also drive improvements in food safety management standards across the industry,” said Bhatt.
Along the same vein, Ettinger is advising smaller manufacturers to be more proactive in reaching out to the relevant authorities and prepare ahead of time.
Foods exempt from registration
The GACC has also clarified that foods that enter China via mail, express delivery, and cross-border e-commerce (CBEC) are exempted from production facility registration.
This also applies to foods carried by travellers.
According to Bhatt, this aligns with China’s broader strategy of encouraging foreign investment in its food sector, as seen in its recent approval of 20 additional seafood enterprises from 13 countries to the list of approved exporters.
This also provides significant opportunities for businesses to enter the Chinese market via CBEC platforms such as Tmall Global, WeChat, Douyin, and JD Global, as they can bypass complex registration processes with the GACC, said Bhatt.
In fact, prior to GACC’s clarification, CBEC is already a popular choice for overseas firms entering China as a way to bypass China’s complex regulatory framework, said Jeff Crowther, executive director of Health Products Association – China (HPA-China).
He said that the GACC’s efforts to streamline the registration process may benefit certain industries and manufacturer.
However, the overall impact, especially on the dietary supplement industry, is likely to be minimal due to the persistent barriers and complexities associated with entering the Chinese market.
Challenges for the dietary supplement industry
Although health foods may be removed from the catalogue of “high risk” foods, challenges still abound for this category.
Overseas firms hoping to sell their health foods within China’s offline retail or local online platforms will still need to register their products with China’s State Administration for Market Regulation (SAMR) – a costly procedure.
“Chief among these is the dietary supplement registration process with China’s State Administration for Market Regulation (SAMR). The SAMR registration is both time-consuming and costly, typically exceeding $150,000 USD and taking two to four years to complete as well as often having to change the formula or potency levels to match China,” said Crowther.
