In a public document, the regulator listed the required standards for design, chemical compounds, and the mechanics for e-cigarettes that domestic manufacturers must meet in order to sell their products. The release sets another significant milestone for China’s vape industry.

The local industry has operated within a gray area for years. Meanwhile, another new bill going into effect on May 1st, will ban 122 vape flavours as proposed by the State Tobacco Monopoly Administration, including numerous fruit and alcohol flavours. The draft rules amend the country’s tobacco monopoly, extending it to e-cigarettes, forcing local businesses to register with the tobacco authority. Moreover local manufacturers must obtain an additional license to prove they are in possession of sufficient funds for production, and an adequate facility and equipment that meet the set standards.

The local vape market takes a hit

As a result of the announced restrictions, the local vape industry has taken a serious hit. However, the Hong Kong-listed Huabao International has experienced a further drop in shares when it was announced that its chair and CEO Chu Lam Yiu, was being investigated by Chinese authorities for “suspected disciplinary violations.”

This led to fall in shares of 65% earlier this year. “Up to the date of this announcement, the company has not been provided with any details of the nature of the suspected violations of Ms. Chu that is currently being investigated,” the company said in a filing to the Hong Kong Stock Exchange. “The business operation of the Group remains normal.” The company noted that the probe is being conducted by the Leiyang City Supervisory Committee, a government body based in Hunan province, southern China.

Read Further: CNA

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