0:00 - Intro with Joanna Junak
00:21 - TODAY'S INTERVIEW IS WITH ALBERT CHAN
00:48 - RECENT EVENTS IN ASIA, ESPECIALLY CHINA
01:22 - MOST PRODUCTS USED WORLDWIDE ARE MADE IN CHINA
01:58 - JUST 10% OF PRODUCTS CONSUMED WITHIN CHINA
02:47 - NOVEMBER 2022 CHINA ANNOUNCED IT WILL REGULATE, NOT BAN
02:58 - POLICY STATEMENT MADE BY THE STATE COUNCIL
03:15 - STATE TOBACCO MONOPOLY ADMINISTRATION ANNOUNCEMENT MARCH 2022
04:55 - MAY 2022 GOVERNMENT ISSUED NEW REGULATIONS
05:36 - THE REGULATIONS ARE COMPLICATED
06:26 - A GOOD STEP FORWARD
06:52 - HEATED TOBACCO PRODUCTS DOMINATE IN JAPAN AND SOME OTHER MARKETS
07:45 - IT WILL TAKE TIME TO DEVELOP REGULATIONS FOR HTPS
09:12 - ALL ALTERNATIVE TOBACCO PRODUCTS WILL BE UNDER ONE UMBRELLA
10:27 - FACTASIA & OTHER CONSUMER GROUPS WELCOME THE MOVE
11:01 - HONG KONG BANNED VAPING IN 2022
12:28 - THE NEW LEGISLATION IS TRANSPARENT AND FAIR
13:28 - Closing remarks
Joanna: Hello and welcome, I’m Joanna Junak and this is GFN News on GFN.TV. In today’s programme we will meet with Albert Chan, consultant to FactAsia, which represents the interests of consumers and advocates alternative safer products. Albert will tell us what has been happening in China since we last spoke. Thank you, Albert, for joining us. Can you tell us what’s been happening in Asia, in particular China, over the last six months or so?
Albert: A lot of things have happened in the last six to eight months in this part of Asia. In particular, China. What we all know china is a huge market, but probably not everybody knows or is aware that, in fact, up to 90% of global e cigarettes. I mean, those using eliquids vaping products 80 90% of these products used worldwide were actually made manufactured in china. And China is still in its very early stage of alternative tobacco products. So amongst the volumes of production in China, the bulk of it, 90% of that are exported to around the world. So that's the current state of play within China. So, obviously, there is a very vibrant manufacturing industry in mainland China. And some of the products, maybe 10% 50% of those, are consumed within domestic market within China. However, there is no clear legislation on the product in China. I think China has been sort of lacking behind in some ways and also because China wants to learn and look at mistakes. If there are mistakes made in other countries in terms of regulations before they actually make the concrete move. And so eventually, after a few years of preparation, studying, research and so on, china eventually announced in November last year that it would regulate, rather than ban, e cigarettes and all types of alternative tobacco products. So that was a decision made by the highest authority in the Chinese government. They called the State council. So it's a policy statement without any detailed regulatory measures.
Joanna: Who has announced further regulations?
Albert: Four months later, the administrative arm of the authority, which is the state STMA, the state tobacco monopoly administration, which is the administrative arm, announced a more detailed piece of regulation which provides for any manufacturers or importers to follow if they want to have a business of alternative products in china. Interestingly, that piece of legislation or the amendments deal primarily with ecigarettes, meaning those which use eliquids the vaping products, if you like. The legislation or the amendments are quite vague. In fact, it doesn't deal with heated products or heat. Not burned products. I believe it's because in china, the illiquid products have been quite advanced and mature. As I said, China is supplying the bulk of global consumption, so the annual production must be quite large. So there is an urgency for the government to introduce legislation to regulate the standards, the quality health warning, et cetera, et cetera, of these products. And that's why in May this year, the government issued new regulation on these products. This will be taking effect in October. So next month. So it's quite rare. So any manufacturer or any importer, foreign companies who want to make or sell or market their products in China, we need to apply for a license for that. So that's the latest legislative position in China.
Joanna: Can you tell us more about the key principles in the regulations published by the State Tobacco Monopoly Administration)?
Albert: I think the main, if I could, simplify all these technical, complicated regulations, I think the guiding principle is to prevent unage smoking. And therefore, you can see there are specific regulations on health warnings. There's specific prohibition of using fancy flavors, like flavors from candies, from fruits, from different kinds of food and so on, because the Chinese government do not want products that will appear to be attractive to young people. So that's the guiding principle. Prevent use smoking or underage smoking. That is something I think the entire industry welcome, and it's a good step forward. I think what we would like to see is a quicker step to regulate the heated products, because currently there's no regulation, meaning it is not allowed in China. If you look at other markets, if you look at Japan, for example, which in some way has similarities with China, heated products are the dominating product in Japan domestic market. I think Korea as well, and in some European countries as well. So, as a consumer rights NGO, South Asia would very much like to see a quicker introduction of legislation to allow these products to be used by consumers in mainland China. But we appreciate that it would take China, the Chinese government, quite a bit of time to study and to understand the technical aspects of this heated product before they can introduce national standards, safety standards, health requirements and so on for these products. And they also would like to look at the market response in overseas market before they make the concrete legislative steps. So therefore, it would be useful I'm not sure if it's practical, but I think it would be useful if the Chinese authorities would work with, cooperate with foreign tobacco companies, the major ones, like Japan Tobacco BHC, which have quite a lot of experience and wealth of experience in heated products. Of course, this will be fairly complicated because of patent considerations. But, I mean, it is just an example to show that international cooperation is all the more important in public interest, in public health matters, and certainly in the subject of smoking and health, there should be stronger international cooperation on the subject.
Joanna: Which products will be regulated under the new regulations? Are there any exceptions?
Albert: No. SDMA has made it clear, and the State Council has made it clear that all alternative tobacco products will be under one umbrella in the long run. So that includes U, liquid, Ecigarettes, as well as heated product. But currently, because heated or heat, not burn products use not just the secret stick, which is similar to conventional cigarettes, but it requires the use of a device, an electronic device. So currently and interestingly, that particular device is regulated by a different ministry which regulates mobile phones because it's considered as an electronic device. But I think eventually I'm not sure, but I think eventually the state tobacco monopoly will have regulatory oversight not just on the sticks, but also on the device. So that's what I'm speculating.
Joanna: Do FactAsia and other consumer organisations welcome these regulations?
Albert: Oh, Definitely. The only thing we don't like is a vacuum in the regulatory framework. Because if there's a vacuum, that means nobody knows what's going on. It's not clear whether it's legal or illegal. So there would be unregulated products in the market detrimental to consumers. So definitely. In China, as in any country, we hope to see early and reasonable regulations. There's one relevant point I wish to make. As most people. As you know, Hong Kong and Macau name to Hong Kong are both part of China. But we are quite independent in terms of legal system. And so last year, the Hong Kong government decided to ban all forms of alternative tobacco products, including vaping, including heated products. So they were actually a few months before the State council in China decided to regulate them within domestic market. In China, but excluding Hong Kong and Macau. So they moved by the Chinese central authorities late last year. And this year, we hope, would reopen the issue in Hong Kong. And that's what we are working with the tobacco company, hopefully to arrange some sort of engagement between health authorities in mainland China and the counterparts in Hong Kong to see whether the ban in Hong Kong is justifiable and whether a review should be undertaken in light of what's happening in China.
Joanna: The legislation will take effect in October. Do you think anything will change? Will it be more difficult for companies to run their businesses?
Albert: No, I think that the legislation is transparent and fair. So whether you are a company from Finland or Japan or mainland Chinese company, as long as you want to manufacture, you want to sell, you want to market or you want to export, you will have to apply for a license. Notably, even manufacturers who don't sell in China who purely export their products will have to apply for a license. As I said earlier, 90% of production in China of Eliquid E Secret are destined for export. So, yes, anybody is a fair play for everybody who wants to get into the business. And quite a few of these manufacturers in China are well established. And they are listed in the stock changes in Hong Kong and traded quite actively, too.
Joanna: Thank you Albert for your interesting summary. That’s all for today. Tune in next time, here on GFN TV or on our new podcast, for more tobacco harm reduction updates. In the next episode, experts from around the world will share their thoughts on nicotine pouches and snus. We will find out whether nicotine pouches and snus are popular in their countries. Thanks for watching - or listening! See you next time.