On December 2, 2021, the State Tobacco Monopoly Administration of China issued the “Administrative Measures for Electronic Cigarettes” for soliciting comments (in accordance with the “Tobacco Monopoly Law of the People’s Republic of China”, “The Law of the People’s Law Implementation Regulations).
The management measures provide clear guidelines on the production and sales of e-cigarettes. Obtaining a tobacco monopoly production enterprise license and approval and registration by the market supervision and management department will be a necessary step for the sale of e-cigarettes. In addition, an "e-cigarette transaction management platform" will be launched for the trade of e-cigarettes.
Soon after it was announced that e-cigarette products will be supervised by the State Tobacco Monopoly Administration, there were concerns that if the new regulations were applied to export products, the e-cigarette market in the United States and Europe might be negatively affected.
In the management approach, manufacturers are required to meet mandatory production and design standards before registration. E-cigarette manufacturers must prove that they have sufficient funds for legal production and facilities that meet the required standards before they can obtain permission from the Monopoly Bureau.
The management method requires that the equipment must be a closed system product that does not allow refilling or tampering. The regulations also specify a maximum nicotine strength of 20 mg/ml-the same as the European Union's Tobacco Products Directive (TPD) standard. (The limit of 20 mg/mL is also the law of the United Kingdom, Canada, Israel, and other countries.)
The current administrative measures do not specify whether the new standards are only applicable to products sold in the Chinese market, or whether they are also applicable to export products.
If the production standard is applied to products exported from China, it will completely disrupt the e-cigarette product market around the world, because half or more of the products sold are open systems designed to refill bottles of e-cigarette liquid.
Chinese manufacturers have long occupied a dominant position in electronic cigarette hardware, with a share of more than 90% at one time. E-cigarette users all over the world rely on China’s e-cigarette modules, fuel tanks and atomizers. Without Chinese e-cigarette equipment, most e-cigarette manufacturers would not survive.