Category: China

  • China to Start Taxing E-cigarettes Nov. 1

    China to Start Taxing E-cigarettes Nov. 1

    Photo: amixstudio

    The Chinese government will start taxing e-cigarettes on Nov 1., reports Reuters.

    Producers and importers of e-cigarettes will incur a 36 percent levy while wholesale distributors must pay an 11 percent tax.

    Experts said that the annual sales revenue of domestic e-cigarette makers is about RMB20 billion ($27.36 billion), so the tax may contribute an additional RMB10 billion to the government’s annual revenue, according to The Global Times.

    China has long been the world’s largest producer of e-cigarettes, though consumption lags behind that of Western countries.

    Inspired by the overseas success of the Juul, venture-backed startups started marketing e-cigarettes to domestic consumers in 2018.

    These companies operated in a legal gray area until the State Tobacco Monopoly Administration (STMA) asserted its authority over the business. In 2021, the STMA announced that it would require e-cigarette companies to obtain a license in order to continue selling to consumers.

    Tobacco products remain a major revenue generator for Beijing, with cigarette sales generating roughly 5 percent of the central government’s tax revenue each year.

    The STMA operates under China’s Ministry of Industry and Information Technology. China Tobacco, STMA’s commercial arm, is a shareholder in China’s state-backed investment fund for the chip industry.

  • BYD Gets Chinese E-Cigarette License

    BYD Gets Chinese E-Cigarette License

    There has been speculation for a few years now that the BYD, one of the largest companies in China, had plans to enter the e-cigarette market with its own brand. Better known as a car manufacturer and battery producer, BYD Electronic shares surged on the Stock Exchange of Hong Kong by as much as 12.5 percent Thursday after the company announced a subsidiary has been granted a license to produce vaping devices.

    “The unit has been granted a tobacco production business license by the State Tobacco Monopoly Administration [STMA],” BYD Electronic said on its WeChat account, according to YiCai Global. Such permits only started to be issued this year in accordance with new regulations. As of Aug. 4, more than 130 firms had been licensed, according to the STMA website.

    “The BYD subsidiary already has a full range of electronic atomization products ready to be patented and is investing in automated production lines, said BYD Electronic, which is the sister company of electric car and battery giant BYD Automobile,” the company stated in a release. “At present, BYD Electronics has completed the patent layout of a full range of electronic atomization products and the construction of automated production lines, fully integrating its own comprehensive capabilities such as new material research and development, precision molds, product design and development, and intelligent manufacturing, and is committed to becoming a Practitioners and leaders in the field of health harm reduction, providing users with excellent products of quality and peace of mind.”

    In 2021, BYD said its e-cigarette business was mainly based on brand OEMs, and “there is no independent listing plan.” BYD Electronics has operated in the e-cigarettes field since 2018. It launched the brand “Beem Core” for ceramic atomizing core technology in 2021.

    Once it starts full production, BYD will go head to head with industry leader Smoore International, which held 22.8 percent of global market share last year, according to Frost & Sullivan research.

    BYD Electronic was spun off from Shenzhen-based conglomerate BYD in 2007 to make cell phone components and printed circuit boards. Its business remit has since expanded to include smartphones, laptops, masks and now, e-cigarettes.

    BYD joins industry late-comer Luxshare Precision, a global designer and manufacturer of cable assembly and connector system solutions, and several other China-based manufacturing enterprises as new vaping industry players. 

  • Smoore Opens PMTA Testing Lab in China

    Smoore Opens PMTA Testing Lab in China

    Photo: Smoore

    Smoore has opened China’s first non-clinical full-scale testing laboratory for U.S. premarket tobacco product applications (PMTA).

    Operated by Smoore’s Analysis, Testing and Safety Assessment Center, the laboratory provides all non-clinical evidence required to bring a new nicotine product to market, including material safety, hazardous components and potentially hazardous components (HPHC’s), and toxicology testing.

    This is the first PMTA testing laboratory to open in China, and will allow Smoore to further improve the safety of its products, and help the brands they work with to successfully pass PMTA certification.

    Prior to Smoore opening its new laboratory, vaping companies wanting to enter the U.S. would need to use third-party partners to complete their PMTA testing, which can be a costly and time-consuming process. With the new China facility, Smoore’s brand partners can more easily complete their PMTA certification and improve their accessibility to the US market.

    “The FDA is very concerned about HPHCs and has set out a list of 33 substances which must be tested for,” said Dr Long, the director of Smoore’s new Safety Assessment Center, in a statement. “Our new laboratory can do all this and more, and has the capacity to test for 37 substances; we are the only facility in China whose testing capabilities covers the full range of HPHCs substances.”

    According to Smoore, the laboratory tests against a world-leading new database of HPHCs, developed by Smoore and derived from international toxicity databases including those maintained by the U.S. Environmental Protection Agency (EPA).

    Advanced computational toxicology software is also used to predict for unknown and potentially hazardous ingredients not included in these databases, further increasing Smoore’s safety assessments.

    Since establishing its first research institute in 2017, Smoore has continued to lead the industry in evidence-based research. Its Safety Assessment Center has raised safety standards to medical grade, and works to constantly review product safety.

    A total of eight products have been approved for marketing by the FDA, many of which are manufactured by Smoore.

  • Vaporesso Gets Chinese Production License

    Vaporesso Gets Chinese Production License

    Vaporesso, a wholly-owned subsidiary of Smoore, has obtained a production licence from China’s State Tobacco Monopoly Administration (STMA), the country’s top regulator of tobacco products.

    The license gives Vaporesso products lawful status in the country, Hong Kong-listed Smoore said in a statement on Wednesday. The licence will be valid through July 2023, according to the South China Morning Post.

    Smoore is among the first group of companies to comply with China’s tightened rules for the e-cigarette industry, which recently became regulated as a traditional tobacco product.

    In March, STMA published final guidelines for the industry, which require that manufactures comply with certain technical standards, including permitted ingredients and additives.

    Licensed manufacturers must also trade with downstream wholesalers on a transaction platform overseen by STMA, according to the rules.

    Licensed manufacturers must also trade with downstream wholesalers on a transaction platform overseen by STMA, according to the rules.

    Less than 50 e-cigarette related companies, including retailers and manufacturers, have met the new restrictions and received licences from the authority so far, STMA’s website shows.

    There are an estimated 1,500 companies involved in the vaping industry, according to calculations by the Electronic Cigarette Professional Committee of China Electronics Chamber of Commerce (ECCC) last year.

    However, more licenses are expected to be issued in coming months as regulators work through a backlog of applications, according to news reports.