The Chinese cosmetics industry and legal requirements on cosmetics: is China going to align with European regulations?

Abstract

In the last decades, the Chinese cosmetics market has experienced an unprecedented growth, so that nowadays it is the second largest cosmetics market in the world. Increased consumption of cosmetics and sophistication of consumers’ demand made China the most sought-after market for many Western companies that started to import their products and establish production subsidiaries in China, taking advantage of an initial lack of regulations and controls on the market. As a result, foreign enterprises, especially European and American ones, easily ended up conquering major market shares thanks to their strong brand image and reputation. However, in the last few years, China has been strengthening its regulation and legal requirements on cosmetics in order to control imported products and ensure safety and quality of cosmetics. Increased requirements on cosmetics and complex procedures for importation and registration of cosmetics let foreign cosmetic companies experience major difficulties and they became actual barriers to entry for many small and medium enterprises that intended to enter the Chinese market. Recent developments in Chinese regulations and legal requirements on cosmetics showed a greater attention from the Chinese part toward safety and quality assessment and a tendency to align its requirements to international ones, especially to the European ones. But what are the real reasons behind these recent developments? Is China going to completely align its regulation to the European one? This is the background on which this thesis was elaborated. Its aim is investigating the current state of regulations and procedures for importation of foreign cosmetics on the Chinese market and trying to answer the above-mentioned questions. The first part of this thesis introduces a general framework about the state of cosmetics at international level, followed by a general overview on the Chinese cosmetics market based on the analysis of its state of development and its general major characteristics. The central part is devoted to recent developments and the current state of regulations and legal requirements on cosmetics in China, which represent important trade barriers for foreign companies, and it ends up with a comparison between Chinese and European regulations that shows how differences have an impact on foreign cosmetic companies that operate on the Chinese market. Finally, the last part attempts to draw conclusions, answer the questions raised throughout the thesis and give a personal interpretation of the implied intentions of China. Is it really going to align to European requirements? Is it trying to catch up with international regulations and standards to foster international trade? Or does it just want to protect its domestic market from the “foreign invasion” while hiding behind the goodwill to align its regulation and legal requirements with the European ones?