China extends transition period for infant formula and cross-border e-commerce

Publish time:12/27/2017 12:00:00 AM      Source: CCM
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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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