China flip-flopping on CBEC regulation: I'm not Surprised.....

• On Mar. 17, 2017, China’s Ministry of Commerce announced that commodities traded through cross border ecommerce will be regulated as personal articles (minimal or no regulatory requirements) from Jan. 1, 2018. The number of CBEC pilot cities will also increase from 10 to 15. New cities include Chengdu, Dalian, Qingdao, Suzhou and Hefei (see the previously approved 10 pilot cities from here). China enacted a series of new CBEC policies starting last year, including a new taxation policy and a positive list system and an extension on the grace period until the end of 2017.CBEC traded commodities will not be restricted by general trading requirements under the new supervision mode. Further detailed rules will be formulated soon regarding this new supervision mode.
• In early 2016, China released a new taxation and new positive list policy to regulate the CBEC industry. The authority also set a new CBEC tax rate and a new quota for the total value of individual CBEC purchases and announced that by Jan 1st 2018 all goods traded through CBEC would be essentially subject to the same regulations as goods traded through general trade channels.
• On May 22, 2016 i made the following predictions in this article............................... "CBEC will be ultimately regulated but not until the ink has dried on contracts and M&A deals between Chinese enterprise and relevant multinational companies in the health food and infant formula sector. Until that time regulation will just divert imports to black market channels and refuel growth in this sector which could derail China's economic development plans. At the end of all this upheaval non-compliant health foods/supplements , infant formula and some other important products will still be on sale and China's Dr Jekyll-Mr.Hyde regulatory requirements for traditional sales and CBEC sales channels will continue. The current posturing is just an appeasement strategy aimed at a strong lobby from traditional sales channels, and a justification for billions spent on food safety legislative reforms and administrative restructuring in China's food sector......"Health foods, nutrient supplements, infant formula and other key commodities will continue to sell on China's CBEC platforms for the foreseeable future given the extreme importance of this sector to China's economy and the role China's food industry will play in its future economic development plans" ... 
• The latest announcement by Chinese authorities gives us important clues about the following: 1) how China uses regulations (or lack of) to shape its internal markets, trade balance and safeguard its economic development plans 2) the lack of progress China is making in domestic food safety capacity building 3) the lack of development of workable regulations for important special food sectors like health foods 4) continued growth in demand for imported food 5) the staggering importance of Chinese ecommerce and the huge growth forecasts for CBEC over the next several years 6) the continued destabilizing influence of daigou/haitao

* If you are interested in discussing any of the issues outlined here or are interested in launching a product here in China using a traceability system or crossborder eCommerce please do not hesitate to contact me here or alternatively just pop me an email at [email protected]