How does China regulate novel plant proteins? Is the government opening up to genetically modified (GM) products? How does Covid-19 affect the agrifood regulatory climate?

This summer, Bits x Bites hosted a webinar with expert Wilfred Feng to answer burning agrifood regulatory questions from startups, investors, and corporates. Wilfred is senior counsel at Dentons Shanghai, specializing in food & medicine, agriculture and environmental laws. 

Below are some highlights from the conversation.

Plant-Based Alternatives Have a Lucky Labeling Advantage in China 

In the US, industry groups have fought to exclude animal-free dairy from the term “milk.” They argue that dairy-free products mislead customers and should not be allowed to be marketed as “milk.”

This isn’t an issue in the Chinese language. The word “meat” (肉) has a much broader connotation. Vegetarian meat (素肉) and soy milk (豆奶) have been described as such for longer than we can remember. Wilfred recommends companies to use a prefix before “milk” and “meat” to indicate the product is plant-based to ensure full transparency for the consumers.

That said, China hasn’t established clear guidelines for regulating plant-based products. There are discussions to create a formal testing protocol to validate vegetarian products as a condition that they are legally permitted to be marketed as such. Whether this becomes a new standard remains to be seen. 

Seeking “Blue Hat” Health Food Registration is not for the Faint of Heart

COVID-19 is raising public awareness around immunity and numerous other health concerns such as blood sugar reduction and better sleep. Companies are innovating functional foods and nutraceuticals with new ingredients and health functionality to meet these demands. Health food products in China are required to have a company- and product-specific registration certificate known as the “Blue Hat.” 

Yet, companies often underestimate how challenging it is to get approvals, particularly health foods that contain active ingredients not included in China’s Health Food Raw Material Directory. 

No new application for health foods bearing functional claims filed since 2015 has been approved. Most approvals were granted 5-6 years after application. Learning about the process early and getting a headstart is crucial for startups in the category. 

Besides health food products, all startups innovating novel ingredients should also get ahead of the regulatory process early. Novel foods are defined as foods and ingredients that do not have a recorded history of safe consumption in at least one province for 35 years. In many cases, even if the whole food format has a long history of consumption, if the ingredient in question is extracted or chemically processed, the ingredient is likely subject to novel ingredient regulations in China. For example, getting approval for protein concentrates from plant sources can take between two and three years. 

The Prospects of GM Ingredients Remain Uncertain 

Since 2004 when the first approvals for GM crops were granted for import by the agricultural authorities, every year there have been additional events approved for import purposes. Just at the start of 2020, two GM corn varieties and a soybean variety were among a total of 192 GM traits to have been approved. 

However, there is no signal that regulators are warming up to GM food crops for domestic planting. Little has changed in GMO regulation since 2004. While the regulatoratory agencies for drugs and food have been reshuffled in the past few years with the goal of improving oversight, the agricultural agency has remained the same. 

Intellectual Property Protection has Changed for the Better 

IP is an important concern for any tech startup. While China does not grant patent protection for living organisms, there are numerous ways to protect the end product and the process. And this is particularly relevant for those developing novel ingredients for plant-based, and cell-cultured meat.

Even though there is good reason for businesses to be concerned about IP protection in China, IP enforcement is improving. There are more and more cases of local companies filing patents and taking action against violations. And to foster modern agriculture, China has created a plant variety protection system to protect the so-called “breeder’s right.” And most recently, it revised the Seed Law to clarify and improve the legislation of plant variety protection. 

This progress is certainly welcomed by those innovating new solutions. 

Recent Supply Chain Disruptions to Tilt Regulations toward Government Priorities 

With COVID-19, African Swine Flu, and US-China Trade War, food security has become a top priority in China. Against this backdrop, the legal framework is sure to grow friendlier for companies that are innovating food ingredients or processes to help the Chinese food system become more self-sufficient.

On both regional and national levels, Chinese policy makers are eager to support national goals for self-sufficiency of food supply. Domestic production cannot become efficient quickly using existing farming production models. New technology innovations are a must. And the food industry can play an active role in shaping how these new technologies will be governed. 

Taking cellular agriculture as an example, Chinese policy makers are actively investigating the considerations for introducing this protein alternative to China. They are eager to hear the industry’s point of view. Cross-sector industry-government coordination will be essential for opening the Chinese market as the technology matures toward commercialization.