The growing trend in the demand of the packaging industry in China is enticing for market players in this area. However, those who are planning to invest in this industry need to understand that there is more compliance that goes along with its growth. Therefore, individuals and business owners have to watch out for regulations and policy changes concerning the packaging industry.
Have a look at our previous article on Industry Spotlight: China’s Imported Food & Beverage Market
Several regulations envelop the many aspects of the packaging industry. What is the reason behind the surge in demand for the packaging sector? What are some of the regulations and preferential policies imposed by the Chinese government? Find out.
Growing demand in the packaging industry
The packaging industry in China may be divided by the type of packaging material, layers of packaging, and end-user industry as listed below.
- Type of packaging material – plastic, paper, glass, foam, metal
- Layers of packaging – primary, secondary, and tertiary
- End-user industry – food and beverage, healthcare and pharmaceutical, beauty and personal care, and industrial
The industry is projected to progress during the forecast period of 2021-2026. Different factors contribute to this which include the e-commerce practices of consumers and the growing health consciousness trend of the population.
According to the latest global data, the packaging market will reach 1,004.9 billion units by 2024, with the rigid metal packaging sector at its head. It has the fastest volume compound annual growth rate (CAGR) of 5.9 percent during 2019-2024. Further, other popular packaging materials include rigid plastics, flexible packaging, and paper and board.
Among the different industries that use packaging materials, the food industry was the most used in China, accounting for a 43.2 percent market share. This is followed by non-alcoholic beverages and “other industries” with shares at 23.9 percent and 17.1 percent, respectively.
E-commerce practices
During the 10 days alone of Alibaba’s Double 11 shopping festival, consumers in mainland China received nearly 1.9 billion packages. In this regard, sellers, as well as logistics firms, made use of packaging materials, thus, fueling such an increase. As of the 38th day of 2021, a new record in the express delivery industry was achieved at more than 10 billion parcels delivered throughout mainland China. In comparison, it took 80 days and 79 days to handle 10 billion parcels in 2020 and 2019, respectively. This record illustrates the vitality of the different industries involved, including the packaging industry.
A growing trend toward health consciousness
The industry aims to create innovative food and beverage packaging materials that have antimicrobial properties and mechanical strength, keeping food products fresh for a longer time. Health consciousness also involves progressing drinking habits of Chinese consumers who are now expected to gradually increase preference to consumption of bottled (packaged) water.
Regulations related to the packaging industry
As the packaging market continues to grow, monitoring and control for this sector become necessary as well, especially that which relates to the environmental effects of using packaging materials. Below are some of the latest regulations related to the packaging industry.
China’s plastic waste ban
The Chinese government has imposed restraint on the development of the packaging industry to lessen the plastic footprint left by damaging materials. In January 2020, the government enforced the banning of single-use plastic bags and utensils from major cities. It will also have banned single-use straws nationwide.
As we know, several industries rely heavily on plastic materials. However, they may also create and proliferate less damaging alternatives to solve the foreseen deceleration in the growth of the packaging industry. Hence, the Chinese government also stressed in the new guidelines efforts to improve recycling infrastructure and policies to boost green biodegradable packages. Biodegradable packaging solutions can provide for more stable growth in the industry.
A national standard on inks used in food contact materials and articles
China submitted to the World Trade Organization (WTO) standards about inks applied to food contact materials and articles. These safety standards also include definitions, basic requirements, sensory requirements, limits on impurities and migration, and labeling of such inks.
DMF system on drug packaging
China’s National Medical Products Administration (NMPA) issued a significant update to the Drug Master File type (DMF) system for the registration of drug packaging materials, active pharmaceutical ingredients (APIs), and drug excipients. Formerly, a company initially needs to submit the registration dossier for the above goods (drugs) to the Center for Drug Evaluation and obtain a registration number. This number will then be reviewed at the same time as the application for the correlated pharmaceutical product.
Effective on August 15, 2019, the procedure and requirements for the registration of drug packaging, APIs, and drug excipients in China have been clarified and simplified. According to this new regulation, data requirements for particular categories may be decreased in some cases. For example, unused pharmaceutical applications of a drug packaging material may have reduced data requirements. This is the case given that the same product can be legally used in direct contact with food as food packaging materials.
Conclusion
A higher demand does not outright mean an increase in industry growth. Without sustainable solutions and innovations, an industry’s growth may become hindered, just like the packaging industry is facing these days. However, with the help of the guidelines from the government and continued support from consumers, industry players will be able to achieve ways of gaining strong growth with sustainable products. Moreover, by having the right people to advise you on your business growth and direction, then as an industry player, progress will be evident, moving forward.
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