China Regulatory Brief: New Food Safety Law, Import Tariffs to be Reduced on Consumer Goods

May 4, 2015 Posted by China Briefing Reading Time: 4 minutes

China to Enact New Food Safety Law in October

On April 24, the National People’s Congress approved and released the amended Food Safety Law, which will come into force on October 1, 2015. Hailed as the China’s ‘strictest food safety law so far’ the law requires companies in the food industry to establish a self-examination system and ensure that their food is traceable. Online food retailers will be held liable if they cannot provide the real name, address and contact information of a food distributor to consumers. The regulations governing the production of infant formula are much stricter. Infant formula producers are now required to report to the provincial Food and Drug Administration with their raw materials, additives, labels and relevant information for record filing. Food safety has become a top concern for Chinese people after the 2008 melamine scandal in which contaminated infant formula caused health damage to over 300,000 infants, killing six.

China to Reduce Import Tariffs on Certain Goods

China’s State Council has recently decided to reduce import tariffs on certain consumer goods, including cosmetics and clothes by the end of June this year, aiming at boosting foreign trade and domestic spending. Meanwhile, China will set up more duty-free shops and implement consumer tax refund policies nationwide. Currently, the import tariff on cosmetics is 50 percent in China. Many luxury and consumer goods sold in China cost 20 percent more than abroad. On the other hand, China missed its foreign trade growth target again in the first quarter of this year. The year 2014 was the third consecutive year that China has failed to fulfill its foreign trade growth target.

China to Provide Subsidies for Shale Gas Exploitation Enterprises

On April 17, the Ministry of Finance and National Energy Administration jointly released a circular which decided to provide fiscal subsidies for shale gas exploitation enterprises from 2016. According to the Circular, the standard subsidy rate is RMB 0.3 per cubic meter during 2016–2018 and RMB 0.2 per cubic meter during 2019–2020. Enterprises that engaged in shale gas exploitation need to report to the local finance and energy departments with their ongoing projects and provide a Liquidation Report by the end of March each year.

China’s New Version of Direct Selling Business License Unveiled

On April 29, the Ministry of Commerce (MOFCOM) released a new version of the Direct Sales License. Companies holding the current 2006 version of the Direct Sales License may choose to switch over to the new license. In China, companies that sell their own products to consumers (i.e. without going through a distributor or wholesaler) need to obtain the Direct Sales License with the local branch of MOFCOM and the Administration for Industry and Commerce (AIC). The license shall be issued within 90 days from the date of receipt of the application form.

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