HOW EXPORT IN CHINA IS CHANGING

With the fastest-growing middle class in the world, China is experiencing major lifestyle changes that could significantly impact the export business. The continuous growth of the domestic per capita income is leading around 80% of consumers to invest in imported food products, especially the ones associated with a healthier diet, thus making China the world’s largest food importer and consumer.

Yet, as highlighted by Reuters a few months ago, China’s new import rules are due to cause headaches for food and beverage makers and exporters alike. The Chinese government has tried to implement new rules covering food imports for years. In April 2021 the General Administration of Customs of China (GACC), which supervised the latest anti-Covid restrictions, issued two new regulations that came into effect as January 2022: Decree 248 and Decree 249.

The first one requires all overseas food manufacturers, processors, and storage facilities to be registered with the GACC to import product into China. This requirement applies to all food products – except for food additives and food-related products – and entails the registration number be provided on the inner and outer packaging of all the foods exported to China. Decree 249 aims at reinforcing food import safety measures, providing new enforcement tools for the GACC to inspect food imports and suspend or prohibit food imports into China when violations are identified.

Decrees 248 and 249 (collectively, New Regulations) also call for supply chain trackability. Specifically, domestic food importers must implement an audit system for overseas exporters and food producers, reviewing their food safety risk control measures and ensuring that the food complies with Chinese laws and standards. Overseas food producers are also required to have a complete and traceable control system for food safety and sanitation and ensure that the food to be exported to China is produced, processed, and stored in compliance with Chinese laws and regulations.

Received by diplomats and exporters as a trade barrier, the new regulations will probably have a strong impact on the global economy. While wanting to protect the country from being overwhelmed by the pandemic and ensure better food safety, China’s new policy is already resulting in a significant economic downturn, leading to a slowdown in domestic and international supply chains.