China Regulatory Alert

Detailed regulations on inspection of imported food and cosmetics through Cross Border E commerce – consultation Paper by AQSIQ

Last week we received notice from a legal contact we have in Shanghai that the Chinese government is looking at ways of reviewing the growing e-commerce industry, particularly foods and cosmetics.

We have obtained a translation of a recent publication asking for feedback.
If you have any feedback please provide it to us. [email protected]

We believe this may herald a change, and possibly a challenge to the many New Zealand companies who are participating in this new trade in that it could be a short early warning of a change in the way this business operates in China.

Regards

Alison

Download translation:   The Regulation of the Supervision Management on the Quality Safety Of Cross-border E-commerce Imported Food

See original:   http://www.aqsiq.gov.cn/gzcypt/cazxyj/20151013/wyyj/

All public comments must be submitted prior to October 30. 

 

Here are some independent observations from people involved in this area:

• This is a consultation paper only and it has not yet been finalised. TMALL also indicated that they are working with relevant key business partners to feedback their comments to the government.

 

• The impact on skin care products should be manageable as most skin care products are currently sold and sent directly from overseas to China for taxation reasons, which means they are exempted from the regulations. The parcel tax on skin products is 50%, which means the products valued above 100RMB are taxable. If they go through bounded warehouse model, all parcels will have to be taxed. However, if they go through as individual parcels from overseas to China, only very small percentage of the parcels will be checked by the customs. Having said that, the risk would be what if the customs increase frequency for check-ups and require more lead time for clearance. Some skin care product exporters also use the warehouse in Hong Kong to send products to the mainland as individual parcels to manage the logistic costs. Below are the logistic costs for your reference.
  • The cost of sending parcels directly from NZ to China is about 6-7/NZD per kg/RMB24-28/per kg.
  • The  cost of sending parcels directly from bounded warehouse in China to Chinese customers is RMB 15/per kg (excluding the shipment cost from NZ to China

 

• They think that the registration and filing for health supplements shall be less restrictive than the normal trading and doubted the blue cap registration will apply to cross border.

 

• TMALL has a warehouse in Auckland which allows them to collect individual parcels from exporters and send them through as individual parcels to China through Cainiao/Smart logistics network, which could be a backup solution for exporters if the regulations come effect in full.