Soon after announcing that vaping products will be regulated by the State Tobacco Monopoly Administration (STMA), the Chinese government has begun to assert control over the industry. There is concern that the U.S. and European vaping markets could be negatively affected if China's new rules are applied to exported products.
Late last week the STMA issued draft rules that require manufacturers to meet mandated production and design standards before being registered with the monopoly. Companies must obtain a license from the STMA after proving they have sufficient funding for legal production and a facility that meets required standards, according to Reuters. The Monopoly Authority also said it will create a "unified national electronic cigarette transaction management platform" that licensed wholesalers and retailers must sell through.
A SMOORE executive told Filter the draft regulations mandate that devices must be closed-system products that don’t allow refilling or tampering. The regulations also set a maximum 20 mg/mL nicotine strength—the same as the European Union’s Tobacco Product Directive (TPD) standard. (The 20 mg/mL limit is also law in the UK, Canada, Israel, and other countries.)
SMOORE told Filter the Chinese government has not specified whether the new standards are meant just for products sold in the Chinese market or if they will also apply to exported products.
If the production standards are applied to products exported from China, it would completely upend vaping product markets around the world, since half or more of products sold are open-systems that are designed to be refilled with bottled e-liquid.
Chinese manufacturers make nearly all of the vaping hardware used everywhere in the world. Vapers in the U.S., Europe, and countries around the world depend on Chinese vape mods, tanks and atomizers to consume the bottled vape juice they prefer—and e-liquid manufacturers would struggle to survive without Chinese vape devices.
Even SMOORE—a huge company that produces devices and atomizers for many major closed-system product brands—would suffer if its VAPORESSO brand were forced to cease production of open-system products.
Because of declining cigarette sales, state governments in the U.S. and countries around the world are looking to vapor products as a new source of tax revenue.
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