Shenzhen: A Unique Frontier in E-cigarette Regulation Journey

Shenzhen is exceptional when it comes to regulating e-cigarettes.

This is the global hub of the e-cigarette industry, with a mature supply chain, comprehensive supporting system, and numerous e-cigarette production companies. Currently, there are over 400 licensed e-cigarette production companies, making up a significant portion of the industry nationwide. The promotion of the legalization and standardized governance of the e-cigarette industry is being led by the Shenzhen Tobacco Monopoly Bureau, serving as the forefront of these efforts.

The Party Central Committee and the State Council attach great importance to the e-cigarette regulatory work, with the party committee of the National Bureau planning comprehensively and providing strong leadership. The journey of exploration in e-cigarette regulation has been challenging, but the achievements were hard-won from the "three encouragements" in the two departments' notices to the "guarding growth", from "net cleaning" to "full-chain monitoring", and through the stages of legislative decision-making, information reporting, smooth transition, and legal and standardized governance. The e-cigarette regulatory work is a noble mission with great responsibility.

After arduous exploration and hard work, the e-cigarette regulatory work of the Shenzhen Municipal Bureau has achieved remarkable results, realizing a fundamental transformation of the e-cigarette market from lack of regulation to rule of law, from chaos to order, from unchecked growth to strict management. The e-cigarette regulatory environment has become more harmonious and orderly, with law enforcement efficiency continuously improving. It is constantly advancing towards modernizing the governance capability of e-cigarette regulation, contributing wisdom and strength to e-cigarette regulation nationwide.

Behind the changes is the relentless effort and resilience of the Shenzhen Bureau's determination to hold onto the green hills.

Regulating e-cigarettes lacks ready-made experience to draw upon, as the unique characteristics of the e-cigarette industry and market mean that regulations cannot simply mimic those for traditional cigarettes. The Shenzhen authorities have fully implemented the requirements set by the national government, carrying out their local regulatory responsibilities in accordance with the law. They have shown courage in taking responsibility, confronting challenges, and tackling tough issues, effectively managing the e-cigarette market in the city and ensuring the smooth and orderly operation of the industry.

Can handle it - dare to be the first, only by working hard can you win.

Before being brought under regulation by law, the e-cigarette industry was in a state of unchecked growth and uncontrolled expansion.

In Shenzhen, the e-cigarette industry is rapidly rising. In the less than 400 square kilometer Bao'an District, thousands of e-cigarette-related enterprises have once gathered, with the industry volume accounting for nearly 80% of the city and nearly 70% of the country, and gradually spilling over to the neighboring Guangming District, Longhua District, and Dongguan City. Within the industry, there is a saying, "The world looks at China for e-cigarettes, China looks at Shenzhen, and Shenzhen looks at Bao'an for e-cigarettes," making it undoubtedly a top priority for e-cigarette regulation.

At the onset of regulatory work, a series of "issues" quickly emerged.

Receive applications from 2000 manufacturing companies, need to complete sorting, data entry, and categorization within a week. Who can handle it all? E-cigarette export products need to be registered, domestic products need to be reviewed, with hundreds of new orders daily. Who can manage this workload? All licensed companies must conduct on-site inspections the day after submitting their applications. Who can meet this requirement?

Facing numerous challenges, the military orders are as solid as a mountain. The party group of the Shenzhen City Bureau leads from the top, with the main leaders taking the front line for a long time, investing in the formation of a team of more than 200 elite soldiers to dive into the "battlefield" of e-cigarette regulation.

In the memory of the staff of the e-cigarette supervision and management office of the Shenzhen Municipal Bureau, for a long time, the office was unusually crowded. Leaders from the National Bureau of e-cigarettes, as well as support personnel from the entire industry, filled the workstations, with paperwork and products waiting for review taking up the entire wall. The phones rang constantly from morning till night. The scene was so busy and overwhelming that it even "scared" the new employees in the workplace.

The regulation of e-cigarettes, from non-existent to now, signifies innovation and exploration. The difficulties faced in strengthening regulation in accordance with the law are clearly more than just "shortage of manpower" and "heavy workload." How are the new policies, regulations, product forms, and regulatory objects to be viewed and dealt with? In the absence of precedent, to chart a new course, we must take firm steps and overcome multiple obstacles.

On one hand, businesses drive the economy and employment; will the regulation of e-cigarettes affect their development? In response to various concerns, the leading officials of the Shenzhen Municipal Bureau have repeatedly reported and communicated with the party committees and governments at the city and district levels, continuously strengthened coordination and cooperation with relevant departments, sought understanding and support, and united consensus and strength. They have integrated e-cigarette regulation into the "co-building, co-governing, and sharing" social governance system, improved the collaborative regulatory mechanism of "government leadership, tobacco control, departmental collaboration, and multi-party participation," and worked together in the same direction, moving forward together.

The Shenzhen Municipal Bureau continues to strengthen communication and reporting with local party committees and governments. It has also established a joint regulatory mechanism with public security, market supervision, customs, and other functional departments in the e-cigarette market. Key areas such as Bao'an and Guangming have implemented systems for joint regulatory meetings and cross-departmental task forces to enhance regular communication and coordination. This effort aims to strengthen collaboration and coordination at all levels, including in terms of understanding, mechanisms, and actions, to continuously strengthen regulation and promote standardization in the e-cigarette market.

On the other hand, the e-cigarette industry is highly market-oriented. Will too many restrictions "strangle" it? Will too many rules limit its development? Faced with various doubts, the Shenzhen Municipal Bureau has conducted extensive investigations and studies to understand the status of the e-cigarette industry. They place great emphasis on listening to the voices of market entities on a daily basis and responding to their demands in a timely manner. At different stages, they organize different themed policy dissemination and guidance services through multiple rounds of comprehensive coverage, guiding companies to actively embrace regulation.

In 2024, the Shenzhen Municipal Bureau, in coordination with local party committees, government, and relevant departments, conducted on-site research at 110 e-cigarette production companies. At the city and district levels, there are 12 permanent e-cigarette consultation hotlines and 2 offline consultation windows. These facilities have received over 2,200 consultations, provided guidance to companies over 1,600 times, held 34 training sessions, and processed 303 permit applications.

Without daring to strive, one cannot succeed in their career; without consensus, it is difficult to gather collective strength. The Shenzhen Bureau has made great strides with determination and vigor. At the beginning of e-cigarette regulation, various problems such as chaos and uneven product quality were effectively resolved. Regulatory efforts continue to strengthen, promoting the comprehensive legalization and standardization of the e-cigarette industry. In recognition of their efforts and achievements, in August 2023, National Bureau Director Zhang Jianmin praised the progress during his research visit to Shenzhen.

Well managed - bravely taking the lead, deeply cultivating core responsibilities and main business.

The ban on flavored e-cigarettes is one of the important measures to protect minors from the harm of e-cigarettes, and it is also essential for promoting the legalization and standardization of the e-cigarette industry. In 2024, the Shenzhen authorities handled 96 cases related to e-cigarettes, involving a total amount of 2.25 billion yuan. In 2023, this number was close to 200 cases, with more than 7 billion yuan involved.

What does the decrease in cases investigated and the amount involved signify?

Chen Kang, the head of the Special Supervision and Management Division (e-cigarette supervision and management division) of the Luohu District Bureau, who has been busy on the front line for a long time, believes that this indicates that under strict and strong supervision, the production and sale of counterfeit and inferior, illegal e-cigarettes and other illegal activities have been severely affected. The chaos in the e-cigarette market is gradually being effectively regulated. However, looking at it from another perspective, it also shows that as regulatory work continues to deepen, illegal activities are becoming more covert and spreading more widely, making it increasingly difficult to investigate and prosecute, and there is a need to enhance the ability to crack down and punish offenders.

Taking into account various factors, it can be determined that the overall regulation of e-cigarettes in Shenzhen is stable and orderly, but also faces some new situations and problems.

Shenzhen Municipal Bureau's monopoly bureau staff members have introduced that new products such as "herbal atomization" and "fruit-flavored filters" are constantly testing the boundaries of regulation, disrupting the e-cigarette market order. Illegal production activities are showing a trend of cross-regional and multi-segment division of labor, with the illegal criminal chain shifting from being concentrated in Shenzhen to being dispersed in different provinces, cities, and even moving towards Southeast Asia. Products in the form of "milk tea cups" and "cola cans" of illegal flavored e-cigarettes have been significantly curtailed, but the circulation of illegal flavored e-cigarettes in the domestic market persists, showing a trend of counterfeit and substandard products being produced in underground factories, combined with self-created formulations and genuine products being smuggled back into the market, seriously endangering the physical and mental health of minors, and so on.

Shenzhen Municipal Bureau actively explores the digital regulatory path for e-cigarettes while strengthening communication and promotion, improving institutional safeguards, monitoring industry operations, consolidating regulatory efforts, and enhancing quality control. These measures have been proven effective in practice and have increased the efficiency of regulatory enforcement.

Strengthening the concept of data governance, building a smart monitoring data platform for the e-cigarette industry, integrating information from the e-cigarette trading management platform, the 12313 tobacco market supervision hotline, and conducting data collection, screening, and analysis to comprehensively understand the sources, channels, and information of e-cigarette products; exploring the promotion of credit supervision in the e-cigarette market, collecting multi-dimensional data on the production and operation of e-cigarette market entities, illegal activities, and violations, constructing a credit evaluation system for e-cigarette market entities. The Shenzhen Municipal Bureau continues to explore and innovate regulatory methods and approaches within the framework of legal compliance.

On August 30, 2024, the Shenzhen Municipal Public Security Bureau launched a comprehensive online tobacco-related information monitoring platform with "full-channel coverage, full-category supervision, and seamless process connectivity." This platform has improved the digital retrieval capabilities of tobacco-related information on the internet, enhanced the clearing of such information, and increased the effectiveness of cracking down on illegal online tobacco sales. The recent success in busting a case of counterfeit e-cigarette products sold on the internet in Luohu, Shenzhen on December 5, was achieved by following a lead discovered through this platform from a vast amount of information.

Zhang Yuxiang, from the Shenzhen Municipal Bureau's monopoly department, has been actively involved in the construction of a nationwide tobacco-related information monitoring platform. He stated, "The National Bureau has high expectations for the platform construction, with the goal of 'built in Shenzhen, serving the entire country, and looking towards the future.' This will guide our overall direction in the construction work.

Shenzhen, a city that has flourished due to reform and opening up, is known as the city of innovation. The "dare to break through, dare to try, open and inclusive, pragmatic and legal, pursue excellence" is the spirit of Shenzhen. Rooted in this fertile soil, the Shenzhen Municipal Bureau never lacks the courage to pioneer and innovate: it was the first in the country to impose administrative penalties on licensed e-cigarette production companies, the Longgang "12.06" case was the first in the country to convict a criminal offense of illegal operation for selling non-national standard e-cigarettes, the Bao'an District Bureau was the first to publicly release information on administrative penalty cases related to companies on the government credit platform, and the use of credit supervision to solve the problem of supervising licensed companies.

The regulation of e-cigarettes is a new and important responsibility of the national agency. The extensive work carried out by the Shenzhen agency serves as a vivid reflection of the industry's efforts to legalize and standardize e-cigarettes, showing a rich, challenging, and successful exploration. There are still many difficulties to be addressed and challenges to be faced in strengthening e-cigarette regulation. The Shenzhen agency has taken the lead with a passionate and dedicated approach, which will undoubtedly provide lasting momentum for regulating the e-cigarette market, ensuring the smooth operation of the industry, and protecting the physical and mental health of minors.