China has recently released its new trade policies. These policy changes will significantly impact foreign and multinational companies doing business with China. In order to support our MMTA member companies to understand the new changes to China’s regulatory requirements, the MMTA has summarized China’s newly updated trade policy.
Restructure of key authorities
On the 17th of March, China’s national legislature adopted a massive government restructuring plan, which is the largest of its kind since China’s open door policy began in the late 1970s. Significant changes were made in China’s government cabinet with the aim to remove duplications of responsibilities between existing ministries and agencies “to make the government better structured, more efficient, and service-oriented” [1]. The restructure results in eight fewer ministerial-level bodies and seven fewer vice-ministerial level ones.
Before the restructure
The diagram below summarises the key institutional changes that will effect foreign companies exporting to China.
According to the EUSME Centre[2], before the restructure, China’s Food and Drug Administration (CFDA), General Administrations of Customs of China (GACC), Administration of Quality Supervision, Inspection and Quarantine (AQSIQ) and State Administration for Industry and Commerce (SAIC) were relatively independent and took different responsibilities.
CFDA focused on draft laws, regulations and rules and policy plans on the administration and supervision of food safety, drugs, medical devices and cosmetics.[3] GACC supervises inbound and outbound activities and oversees all the regional customs across the country.[4] AQSIQ was responsible for national quality, metrology, entry exit commodity inspection, entry-exit health quarantine, entry-exit animal and plant quarantine, import-export food safety, certification and accreditation, standardization, as well as administrative law-enforcement.[5] SAIC was in charge of market supervision/regulation and related law enforcement through administrative means. Such as, maintaining market order and protecting the legitimate rights and interests of businesses and consumers by carrying out regulations in the fields of enterprise registration, competition, consumer protection, trademark protection and combating economic illegalities.[6]
Before the restructure, there were 3 pillars under AQSIQ, including CIQ (the Inspection and Quarantine of Imported and Exported Products, CNCA (Industry Manufacturing Licensing) and SAC (Product Standard and Quality Inspection).
After the restructure
After the restructure, a super market regulator – State Administration of Market Regulation (SAMR) has been established combining the responsibilities that were previously held by CFDA, SAIC and part of AQSIQ. CFDA, AQSIQ and SAIC no longer exist after the restructure. However, CNIA and SAC which were previously under AQSIQ remain and are now under SAMR’s supervision. While CIQ (previously under AQSIQ) is now merged under GACC. The new GACC department now also includes CIQ.
As the single most powerful market regulator, SAMR will oversee the whole market order, including.[7]:
- Market entity registration.
- Commodity prices.
- Anti-monopoly and anti-unfair competition enforcement.
- Commercial bribery.
- Trade marks and patents infringement.
- Food and industrial product safety.
- Drug administration.
- Quality inspection, certification, and accreditation.
New China customs after restructure
From April 20th 2018, China’s Inspection and Quarantine (CIQ) department has become a part of the General Administration of China Customs (GACC). This is among some of the key changes that the Chinese government has introduced to facilitate China’s import process. This overhaul in China’s customs clearance system is seen to be faster and a more efficient process. This pre-emptive move responds to the expected influx of imported foreign products set to hit China in the upcoming years.
One Application for One Application
Before the merge, enterprises exporting to China would have to apply separately to the CIQ and GACC, and commodities would endure two separate inspections.
With the new system in place, enterprises need to only apply once for a comprehensive inspection of their products, receiving all relevant certifications from both bureaus upon completion.
What Does This Mean For You?
Simplifying procedures and minimising inspections will result in three key areas of improvement:
- Reduced administrative costs for the exporter which can then be reinvested into product development and/or marketing capabilities
- Reduced risk of damages inflicted on products due to less product handling at inspection stage
- Reduced waiting times in customs clearance and more efficiency which, sees your product on the market faster
Suggestions to EU SMEs from EUSME Centre
- Crucial to maintain a good relationship with SMRA and GACC, the two key authorities in-charge for imports;
- GACC now oversees both customers and import inspection and quarantine process;
- Keep on monitoring the latest trade policy of China;
- One of the top priorities is to maintain open communication and a good working relationship with SMRA.
Source: China Nonferrous Metals Industry Network , 16th June 2018, translated by Ruting Su, MMTA
References
- The State Council of China., (2018). China’s massive cabinet restructuring plan passed. [online]. The State Council of China. [Viewed 11 July 2018]. Available from: http://english.gov.cn/news/top_news/2018/03/17/content_281476080527562.htm
- Ingrid Ge., (2018). Updates on China’s Trade Policy. [online]. EUSME Centre. [Viewed 11 July 2018]. Available from: http://www.eusmecentre.org.cn/event/2018-06-20/updates-chinas-trade-policy?utm_source=EU+SME+Centre+Mailing+List&utm_campaign=f4841867dc-EMAIL_CAMPAIGN_2018_06_21&utm_medium=email&utm_term=0_e920ac2d4f-f4841867dc-247297605&ct=t(EMAIL_CAMPAIGN_2018_06_21)&goal=0_e920ac2d4f-f4841867dc-247297605&mc_cid=f4841867dc&mc_eid=8f7e08a7b4
- China Food and Drug Administration., (2018). Main Responsibilities. [online]. China Food and Drug Administration. [Viewed 10 July 2018]. Available from: http://eng.sfda.gov.cn/WS03/CL0756/
- General Administrations of Customs of China., (2018). Overview of GACC. [online]. General Administrations of Customs of China. [Viewed 10 July 2018]. Available from: http://english.customs.gov.cn/about/mission
- Administration of Quality Supervision, Inspection and Quarantine., (2018). Mission. [online]. Administration of Quality Supervision, Inspection and Quarantine. [Viewed 10 July 2018]. Available from: http://english.aqsiq.gov.cn/AboutAQSIQ/Mission/
- State Administration for Industry & Commerce of the People’s Republic of China., (2018). Mission. [online]. State Administration for Industry & Commerce of the People’s Republic of China. [Viewed 10 July 2018]. Available from: http://home.saic.gov.cn/english/aboutus/Mission/index.html
- State Administration for Market Regulation., (2018). [online]. [Viewed 11 July 2018]. Available from: http://samr.saic.gov.cn/
- ACOLINK LTD., (2018). China Customs streamlines trade by incorporating entry-exit inspection and quarantine agency. [online]. ACOLINK LTD. [Viewed 11 July 2018]. Available from: https://acolink.com/news/2018/china-ciq-and-gacc-merge-streamlining-trade
