(1) Cosmetics Classification
At the outset, it would be useful to note that at present, the Ministry of Health (MOH) has classified cosmetic products in China into 2 categories, i.e., 'ordinary cosmetics' and 'special cosmetics'. Special cosmetics are products containing biological ingredients, such as, hair dye, sun block, deodorant and slimming products. Ordinary cosmetics are items such as lipsticks, nail care and perfume.
(2) Registration Procedure
At present, the registration procedure in China for the cosmetics industry is inconsistent with the World Trade Organization (WTO)'s spirit of 'national treatment'. In China, domestic cosmetics (depending on the category, i.e. Ordinary or Special) and imported cosmetics have different registration requirements.
Cosmetics imported into China face tight regulatory control with a dual-registration process. If a manufacturer, distributor etc, wishes to market their cosmetic products within China while they are located outside of China, they must register with both the MOH and the General Administration of Quality Supervision, Inspection and Quarantine (AQSIQ) (previously known as State General Administration for Quality Supervision and Inspection and Quarantine). Thus, it is true that the registration procedure is rather cumbersome.
- Imported Cosmetics
All imported cosmetics, whether classified as ordinary or special, must obtain pre-market registration with the MOH. The registration process is often complicated, time consuming and costly. The registration fee is approximately US $244/- per category. There is also an inspection fee which ranges (depending on the type of product) from approximately US $ 488/- to US $3900/-. The whole registration process takes approximately 9 to 12 months.
- Domestic Cosmetics
For domestic cosmetics classified as 'ordinary cosmetics', pre-market registration with the MOH is not required. However, the local authorities must be notified within 2 months of the cosmetics being launched on the market.
If domestic cosmetics are categorized as 'special cosmetics', they are treated by the MOH as being the same as imported cosmetics in that pre-market registration is necessary but the registration fee is slightly lower at approximately US $122/-. The inspection fee ranges (depending on the type of product) from approximately US $610/- to US $2805/-.
- Imported Cosmetics
AQSIQ requires pre-import registration for all imported cosmetics. The application fee is approximately US $37/- while the inspection fee is approximately US $37/- per item. As with the MOH, the process at the AQSIQ is just as cumbersome and time-consuming. The estimated registration process would take 4 to 5 months to complete.
In addition, upon obtaining registration with the AQSIQ and the MOH, the importer is required to purchase a label ("CIQ" sticker) from the AQSIQ, which is to be stuck on each consumer package of the imported cosmetics. Then, when the cosmetics products enter the local markets (markets outside Beijing) in China, each of the registered products must obtain local re-approval and notification from provincial and city branches of the AQSIQ. This process would again incur further fees.
- Domestic Cosmetics
AQSIQ does not require pre-market registration for any class of domestic cosmetic products.
It is hoped that with China's accession to the WTO, there will be significant improvement in respect of the cosmetics industry. Besides lowering its average tariff on cosmetics from the current average of 23.5% to 10.7% by 2005, it would be helpful if China would streamline the registration requirements for domestic and imported cosmetics. In addition, adopting fast, efficient, quality inspection method for the cosmetics may help to reduce the inspection time. Many in the cosmetics industry would like to see these changes occur because cosmetics are volatile goods in that they may go out of fashion or vary from season to season. So to remain competitive, it is essential that importers are not penalized due to the cumbersome and time-consuming process of registration.