Chinese consumers are getting more sophisticated and have higher expectations regarding the safety of products. Chinese consumers expect imported and foreign branded products to fully comply not only with Chinese regulations but also with overseas standards. Dr Martina Gerst, Standards and Conformity Assessment Advisor at the EU SME Centre, breaks down the complicated regulatory rules in China and offers a step-by-step approach to compliance of toys.

You will get efficient and thoughtful service from T-Safety.

Introduction

China’s Singles Day, the world’s biggest online shopping event of the year, takes place on November 11 every year. Chinese shoppers last year were spending USD 17.8 bn in 24 hours1.

Besides the increasingly powerful role of e-commerce, Chinese consumers are getting more sophisticated and have higher expectations regarding the safety of products. Chinese consumers expect imported and foreign branded products2 to fully comply not only with Chinese regulations but also with overseas standards. Product safety and consumer rights are increasingly growing in parallel to the unprecedented growth. Every year March 15th, the World Consumer Rights Day is a big deal in China. In China’s ‘name-and-shame’ TV show “CCTV March 15 Gala” (晚会 3.15), companies and platforms were targeted for unfair practices by the country, for example for selling dodgy health products3. Savvy consumers are pushing for being adequately informed about the authenticity of products purchased via E-commerce; regardless whether these products are domestically produced or imported from abroad like from the European Union (EU).

The EU is China’s biggest source of imports. China and Europe are currently trading more than €1 billion a day, industrial and consumer goods likewise4. In practice, this concretely means for manufacturers on both sides, compliance with respective local or regional regulations and mandatory standards (the so-called [GuoBiao] GB standards) is essential. No compliance – no sales.

So, what implications European companies face when planning exporting to China?

The regulatory world – a brief intro

In a nutshell, market access for products and services to China is generally not free. For many product categories, government approval is required before goods can be imported to the Chinese market – this is the first big difference European companies have to face when thinking of exporting to China. These approvals come in various forms, such as licences, certifications, registrations, marks, and even individual approval of shipments. They are issued by the government itself or by appointed bodies acting on behalf of the government. All of these approvals have one thing in common: They will be regularly checked at the borders or, in case of China domestic production, by inspection authorities5.

The scale and thoroughness of inspections relating to product safety probably exceed those of any other economy worldwide. As such, it is of utmost importance that any organisation planning to export consumer goods to China becomes familiar with the Chinese regulatory framework, standards, and conformity assessment environment.

The regulatory world in China is a world of its own and very often difficult to navigate for EU companies.

In what concerns the highly sensitive issue of product safety, in order to be compliant to China’s solid but complex regulatory environment, a company needs to get familiar with the web of product safety law, regulations for supervision and administration of products, ministerial orders and last but not least, compulsory and voluntary standards, instructions, and other rules.

In general, related to product safety, the three “must-know” government organisations in China European companies should be aware of are AQSIQ, SAC, and CNCA.

The highest government unit responsible for implementing the product safety law is The General Administration of Quality Supervision, Inspection, and Quarantine (AQSIQ) – a ministry under direct supervision of the State Council. AQSIQ has an overarching function to regulate, coordinate, and supervise the respective activities across all ministries.

Directly under AQSIQ, two vice-ministerial government agencies are worth to be noted – the General Administration for Standardisation (SAC), and the Certification and Accreditation Administration of China (CNCA). Both bodies have regulatory power and control over all nationwide activities in their respective areas.

At the regional level (provinces, autonomous regions, and municipalities), the regional government is in charge of implementing and administering the activities of AQSIQ. Most provinces have two authorities in place for performing this task: the Bureau of Quality and Technical Supervision (BQTS), and China Inspection and Quality Services (CIQ). These provincial institutions are also in charge of the practical operations of all market surveillance activities in China6.

One important element of China’s product safety system that is of high relevance to EU companies, is the China Compulsory Certification (CCC). CCC is particularly important for consumer products, since it covers many types of electrical and electronic household appliances.

The basics of CCC

The system consists of a compulsory certification, issued by a government-appointed certification body, and a mark, controlled by a government agency. The product categories that require CCC certification are listed in the CCC catalogue. For products not listed in the catalogue, it is not possible to obtain CCC certification. The CCC system is not a self-declaration and is not comparable with Europe’s CE-marking.

The CCC system unifies the certification process for many products and ensures that the same rules apply both for imported and domestically manufactured products. Current requirements of the CCC system are basically built on a one-size-fits-all system, not always related to the level of risk inherent to the products.

Core elements of CCC consist of mainly four steps: watertight technical documentation already provided in the application, shipping of samples, type testing and factory inspection.

If all goes well during the certification process, ideally, the CCC certificate will be issued after a year. It is valid for five years, under the condition that regulations for maintenance of the product certificate are met.

Part 2

A Step-by-step approach to compliance7

Children’s toys are one European product that is very popular with Chinese parents and currently often purchased online. Therefore, it is very closely monitored for compliance of CCC.

Therefore, for a toy manufacturer, it should be therefore very clear that he has to make sure that his products comply with quality, safety, labelling and the CCC certification.

A systematic approach is required to find a proper path through the maze of Chinese compliance regulations. Such an approach should cover not only the products themselves, but also the most common components and relevant spare parts if required. Depending on the responses to the questions below, it may be advisable to source some of the components in China rather than subjecting existing components to a complicated and costly certification and licensing process.

Questions include:

• Does the product fall into the catalogue for prohibited or restricted goods?
• Does the product fall under the scope of the Law of Product Quality?
• Does any other compulsory certification, licencing, or labelling scheme apply?
• Which compulsory and voluntary standards apply to my product?
• Is any voluntary certification and labelling scheme available?
• Is the product listed in the product catalogue for import and export controls?
• Is the product documentation compliant with the applicable regulations?

For toys, the CCC catalogue lists six toy categories to be certified and to put the CCC logo on the toy before selling it in China:

• Electrical Toys
• Plastic Toys
• Metal Toys
• Dolls
• Launching Toys
• Child carriers

For most toys, the most important mandatory standard is GB -, defining the safety requirements. The standard consists of four parts addressing basic safety concern and physical, flammability and chemical safety.

Electric toys for example, in addition will also have to meet the mandatory standard GB - for Electric Toys – Safety.

Key recommendations to consider when navigating the system:

• Any importer of goods into China must be familiar with the key elements of the system
• Any importer must be able to properly document the safety of its products
• Pay attention to the details of documentation, ensure that instructions are in Chinese
• Never ship a product before all licenses and certificates are secured
• Be aware of the standards used in China, and the differences to the respective international or European standard
• Compliance in the EU does not imply compliance in China

In general, the system very different from Europe and compulsory standards are the key to compliance. Compliance in Europe does not necessarily mean access in China – albeit many requirements are similar. The system requires expertise on the ground in China and time-to-market, as well as cost for small series are not negligible. Last but not least, compliance and certification have an impact not only on the manufacturer and the importer but on the entire supply chain.

Many companies have paid a high price for ignoring both the importance that China gives to product safety and the effectiveness of its enforcement mechanisms. AQSIQ regularly posts pictures on the internet showing the destruction of imported consumer goods that have failed to meet Chinese safety regulations. For the companies involved, this has consequences beyond the financial losses incurred due to the confiscation of goods. They must also pay fines and deal with the additional costs of increased inspections for future exports to China.

References

For more china safety productsinformation, please contact us. We will provide professional answers.

1 F. Lavin, Nov. 15th, , Singles’ Day Sales Scorecard: A Day In China Now Bigger Than A Year In Brazil, at https://www.forbes.com/sites/franklavin//11/15/singles-day-scorecard-a-day-in-china-now-bigger-than-a-year-in-brazil/#d63d39be (last accessed May 1st ).S

2 China’s Name-and-Shame TV Show Puts Household Brands on Edge, https://www.bloomberg.com/news/articles/-03-14/china-s-name-and-shame-tv-show-puts-household-brands-in-hot-seat (last accessed April 27th ).

3 J. Guo, Consumer Day shame for companies in China, http://supchina.com//03/15/consumer-day-shame-companies-china/ (last accessed April 24th ).

4 China (), http://ec.europa.eu/trade/policy/countries-and-regions/countries/china/

5 More details can be found on the Product Safety and Conformity Assessment for Consumer Products guideline.

6 For more details about China’s regulatory bodies across different sectors, see the “Who-is-who” guideline on the Centre’s website

7 For more details about CCC and compliance, further information can be found in the Centre’s CCC and product conformity guidelineshttps://www.eusmecentre.org.cn/publications/updated-guidelines-on-the-china-compulsory-certification-ccc-scheme/

About the EU SME Centre
The EU SME Centre in Beijing provides a comprehensive range of hands-on support services to European small and medium-sized enterprises (SMEs), getting them ready to do business in China.

Our team of experts provides advice and support in four areas – business development, law, standards and conformity and human resources. Collaborating with external experts worldwide, the Centre converts valuable knowledge and experience into practical business tools and services easily accessible online. From first-line advice to in-depth technical solutions, we offer services through Knowledge Centre, Advice Centre, Training Centre, SME Advocacy Platform and Hot-Desks.

The Centre is funded by the European Union and implemented by a consortium of six partners – the China-Britain Business Council, the Benelux Chamber of Commerce, the China-Italy Chamber of Commerce, the French Chamber of Commerce in China, the EUROCHAMBRES, and the European Union Chamber of Commerce in China.

• How “Made In China” can become “Made By China”
• How China’s manufacturing sector is improving to change its image
• ‘Made in China ’ – Turning the world’s largest manufacturer into the strongest?

Industries are also slowly increasing involvement in the overall production process, from innovation and R&D to production. For instance, Chinese toy manufacturers have progressed to becoming brands in their own right, stepping away from contract manufacturing

China’s reputation as a manufacturing hub has not always been favorable and the country has been striving to shed these negative perceptions with demonstrable success at both local and global levels.  Many local middle-income consumers now prefer China-made items to their imported counterparts. In , local consumers’ perceptions of domestic electronics manufacturers were not kind, regarding them as little more than cheap, low-quality impostors. This changed by . Eight of the top-ten smartphone brands sold locally were Chinese, with Huawei and Xiaomi in the top spots.

Globally, China is beginning to be seen as a credible source of technological goods. The increasing quality and technological expertise is evident in the change of the country’s export makeup. In , Machinery and Electronics made up only 18.6% of total exports. This increased to 29.25% in , and reached  43.34% in . Chinese brands made the top ten list of smartphone brands worldwide in with Huawei was ranked at number three, shipping 152 million units worldwide.

Environmental Action – China’s Revisited Rules

In , various reports found that China’s underground water, groundwater, and soil were all contaminated. In the same year, China passed amendments to a national Environmental Protection Law (EPL). The Revised Law aimed at cracking down on polluting textile factories, as well as imposed stricter obligations to pollution prevention and control on all other enterprises. Both local and multinational companies could be fined or convicted for failure to comply.

By the end of , provincial and city-level authorities investigated a total of 647,000 construction projects involving environmental violations and rectified 618,000 (95.6%) of them. Furthermore, there are now 559 judicial organizations specializing in environmental resources-related cases. In just two years (-), the People’s Court heard over 300,000 such cases, 2.5 times the combined number of cases during the ten-year period of - (Source).

In , a China Water Risk survey found that while manufacturers are on the way to becoming green, the journey comes at a significant sacrifice. Out of the 85 textile manufacturers surveyed, over 50% have spent more than 2M RMB to comply with new standards and 81% have plans for future investments.

They are shouldering the costs of going green while still maintaining a low-price model, placing huge financial pressures on smaller businesses that lack support from brands or the government. That year, officials in more than 80,000 factories were reprimanded, fined, or charged with criminal offenses and entire industrial regions were temporarily shut down in a bid to push manufacturers to comply with updated environmental standards.

‘Made in China ’ – Beijing’s New Battle Plan

Besides enacting stricter laws and regulations on manufacturing, the Chinese government has also developed a campaign aimed at changing what the world thinks about its exports. Launched in , Made in China , aspires to comprehensively upgrade and modernize the Chinese industry, eradicate pre-conceived notions of inferior quality levels and re-define China as a high-end manufacturing power.

The Cheung Kong Graduate School of Business’ (CKGSB) analysis of initiative reveals the country is still lacking in terms of core technology and innovation. Currently, domestic content is comparatively low for high-tech products, with foreign content comprising more than 50% of these products on average. In certain categories of goods, such as high-level hydraulic components, China is almost entirely dependent on foreign production. Made in China hopes to transform China from the world’s largest manufacturer to the strongest, establishing more independent local industries.

The Changing World of Global Quality Control Standards

In order to become a globally trusted manufacturing hub, China must also keep up with ever-changing international export standards including stricter regulations and specific guidelines and constraints from each global market. Quality control testing doesn’t just focus on whether a product complies with safety regulations. It also determines if goods are fit for use and performing as expected by the end user. A detailed assessment of a product’s longevity helps suppliers enhance product designs, services, and customer satisfaction. Furthermore, labs can benchmark products from different suppliers and develop a broader view of particular industries.

Another key aspect of quality control standards is the auditing of any factory or manufacturing plant. An assessment must determine that the facility has the appropriate equipment required for production and that the machinery and tools are properly calibrated and adequately maintained. In addition to controlling pre-production and production sampling tests, pre-shipment tests are also crucial, ensuring that the shipped product is the same as the one that was expected and ordered.

How Independent Testing Makes Chinese Toys Safer ?

Over the years, stringent testing protocols, brought about by a focus on customer safety and satisfaction, have improved the country’s manufacturing processes.

Take the production of toys as an example. The manufacturer or importer of Chinese-made toys must ensure that all products are compliant with its destination market’s safety regulations, which are extremely strict because the end users are children.

In the United States, the Consumer Product Safety Improvement Act (CPSIA), overseen by The Consumer Product Safety Commission (CPSC), regulates all imported toys and children’s products. If the items are destined for the European Union, they must bear the CE mark, proving they meet the European Toy Safety Directive (/48/EC) and have passed the EN 71 standard for mechanical, chemical and inflammability testing.

Independent testing remains the best strategy for China to build trust and protect both itself and consumers. The result of competent quality controls and testing procedures is that more high-quality goods are making it out of China and into the international market.

Made in China to Made by China?

China is quickly becoming more than just a manufacturing hub but also a place for technological innovation. A progression that is evident in the country’s increasing contribution to the world of electronics and machinery and move up the value-chain, with Chinese brands becoming recognised in their own right at both local and global levels. The country’s steps to becoming environmentally friendly also gives manufacturers a competitive edge among increasing environmentally-conscious brands and consumers.

Besides this, with wages and rents steadily rising in China, ASEAN countries are becoming more favorable choices for brands. A report found that the average cost of factory labor in China is $15-18 a day. It is $7 a day in Vietnam and $9 in Indonesia. Thus, upgrading its manufacturing capabilities is crucial if China wants to stay ahead in the competition.

While these changes have come at a price, the Chinese market continues to grow. In , consumer spending increased by approximately 13 percent, compared to a 7 percent growth in GDP.

Want more information on bulk hard hats? Feel free to contact us.