China
has revealed to delay the transition periods for infant formula registration
and cross-border retail. This step is aiming to strengthen the development of
cross-border e-commerce in the country, giving foreign exports a benefit over
domestic manufacturers who hoped for less competition in the short run.
According
to market intelligence firm CCM, the China Food and Drug Administration
announced that infant formula made by overseas producers before 1 January 2018
can be imported and sold until it is past its shelf life, with or without
formulation registration.
This
has a great effect on foreign exporters of infant formula. Looking at the fact,
that many infant formula products have a shelf life up to three years, the
actually gives exporters the ability to sell these products for another 3 years
in theory in Chinese markets without registration.
The
decision of the Administration to extend the deadline can be explained with the
situation of high inventories of infant formula at the moment. The authorities
were worried that sellers would illegally change the expiration date of their
existing stockpile or conduct dump sales in order to get rid of the inventories
before the deadline.
Domestic
manufacturers, who hoped for a lessen competition in 2018 due to the
registration barriers of foreign exporters, have been disappointed. The market
share is hence likely to be dominated by foreign products in the new year as
well.
The
Chinese government has also announced to delay the establishment of tougher
rules on the country’s cross-border retail market until the end of 2018, giving
foreign enterprises more time to prepare for the changes.
For
health food, infant formula milk powder, and foods for special medical purpose,
this decision is good news for foreign enterprises, which are exporting their
products to China. These enterprises are allowed to get more time to apply for
registration and filing the certificate, without having to worry to use sales
due to missing registrations.
Planned
new rules will broadly increase taxes and regulations on products sold via
cross-border channels in the country.
Cross-border
e-commerce in China
According
to the Chinese government, the development of cross-border e-commerce has
reached a breakthrough point in China and promoting the liberalisation and
facilitation of international trade are of great significance for accelerating
the transformation of foreign trade development and enhancing competitiveness
in the domestic market.
After
all, over the past two years the State Council approved the establishment of
cross-border e-commerce comprehensive pilot zones. As a result, relevant
regions have conducted pilot tests in terms of technical standards, business
processes and regulatory modes, forming a series of good experiences and good
practices. The scale of import and export of the pilot zones has been rapidly
growing in China.
According
to the government, the replication of nationwide integrated online services for
cross-border e-commerce as well as offline industry park are the two major
platforms to enhance in the future. The aim is to establish information
sharing, financial services, intelligent logistics, risk prevention and control
to integrate into one system. This should lead to the exploration of new
experiences and lift China into a greater role in establishing international standards
for cross-border e-commerce.
To
achieve the development, the industry must select a batch of cities with good
basic conditions and great potential for development to build a new
comprehensive pilot zone and promote the development of cross-border
electricity suppliers in a broader scope.
The
focus of Chinese e-commerce is still part of promoting the One Belt and
One Road initiative, strive to create a new type of foreign trade
infrastructure that is interconnected and intelligent, encourage the
construction of overseas warehouses covering major countries and key markets,
and strengthen the construction of supporting service systems such as logistics
networks.
Lastly,
the government announced to promote the establishment of a trading risk
prevention and consumer rights protection mechanism for cross-border e-commerce
businesses. In a line of this, it vigorously cracks down on illegal activities
as fake and shoddy goods. systems.
About this article
The
information of this article comes from CCM, China’s leading market intelligence
provider for the fields of agriculture, chemicals, and food & feed.
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a detailed analysis of China’s dairy market, please have a look at
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