China mulls bringing e-cigarette regulation in line with traditional tobacco products

BEIJING (Reuters) – Two of China’s regulators plan to bring the rules governing the sale of e-cigarettes and other new tobacco products in line with those for ordinary cigarettes.

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The Ministry of Industry and Information Technology (MIIT) and China’s State Tobacco Monopoly Administration, posted online the draft regulations that could potentially curb a fast-growing

industry.

In 2019, a string of Chinese e-cigarette companies emerged targeting the domestic market, following the overseas success of the Juul.

The most successful among them, RLX Technology Inc, raised $1.4 billion in an IPO in January that valued the company at $35 billion.

RLX Technology did not immediately respond to a request for comment.

A huge market of smokers and its large electronics manufacturing industry makes China a promising market for the e-cigarette industry.

Yet the sector exists in precarious regulatory area.

China’s tobacco industry is controlled entirely via a government monopoly, and strict controls determine what companies and retailers can produce and sell cigarettes.

Cigarette sales generated 5.45% of China’s overall tax revenue in 2018. For this reason, industry experts have long expected the state to intervene in the business operations of China’s private e-cigarette companies.

In November 2019, Chinese regulators forbid e-commerce platforms from selling e-cigarette products online. The ban swiftly curbed the growth of the sector, and many brands focused their business toward offline sales.

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