Reliable sources have unofficially confirmed that China is certain to implement CBEC changes as early as January 1 next year.
The requirement would apply to products that have not be registered after the new regulations have been put in place, regardless of how long they have been sold on e-commerce platforms like Tmall and JD.
However, companies will still be able to sell products on their own online website and post directly to customers in China. This would be treated as personal imports.
Confirmed but not absolute
The news comes from the New Zealand Trade and Enterprise (NZTE) and KJ Bas, an Auckland-based consultancy firm that specialises in helping businesses enter the Chinese market.
NZTE shared that they have reached out to the China Customs Inspection and Quarantine Department, which unofficially confirmed the information.
However, NZTE added that nothing was definitive so far, revealing that some, like the Alibaba Global team, are still sceptical that the changes will happen at all.
Still, the government agency stressed that businesses should prime themselves in case the speculations turn out to be true after all.
“We also strongly urge companies to prepare alternative strategies should the CBEC channel become more restricted early in 2019,” said NZTE in a statement.
Better regulation, higher taxes
The existing trade laws were introduced in Apr 2016. The transition period was extended more than once and is currently set to expire in December 2018. While businesses have thrived on the extensions, some have used it to bypass national standards.
Ricky Yang, Managing Director of KJ Bas, expressed in an email to NZTE that he believes Chinese authorities are not trying to end CBEC, but to better regulate products entering the country as well as increase taxes.
“It is understandable that companies who have their products registered in China would also apply pressure to the authorities to stop their competitors,” Yang added.
Aside from cosmetics, Yang reveals that his sources have shared that the new laws will most likely affect infant formula, and it will not be long before it extends to products in the health food category.