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China

US supplements economy loses $8bn due to Great Wall of Regulations

By RJ Whitehead , 29-May-2014

US supplements economy loses $8bn due to Great Wall of Regulations

The United States alone stands to lose over US$8bn in dietary supplement exports to China as a result of the burgeoning market’s onerous regulatory environment.

In a report published by the US-China Health Products Association this week, the US-CHPA warned the US Department of Commerce that potential exports worth US$8.37bn—equating to 2,791 jobs—were being missed.

And the study does not cover every single American dietary supplement company, the US-CHPA acknowledges that the actual figure stands to be much higher, although It believes the formula it used to work out lost trade and jobs provides a reliable representation of the market.

The group [we surveyed] represents some of the industry’s largest players and serves as an excellent example of what exactly is being lost in terms of U.S. exports and jobs,” the authors noted.

The non-profit exporters’ advocate asked each participating company to supply their 2013 sales for the three largest markets they do business in, then used a statistical formula to work out a weighted average sale for each customer, which was then multiplied by China’s 275m strong consumer base to come up with a potential export sales figure for the China market. 

USCHPA then asked the companies based on the potential exports to China figure, how many jobs would that create for your company. What the association found was that for each US$3m in exports, one job was created.

The research concluded that getting over China’s “Great Wall of regulations” has proven an insurmountable task for most companies. 

Navigating the market as well as the inconsistencies with importing regulations have made market entry more like a game of blackjack and the house always wins,” said Jeff Crowther, executive director of the US-CHPA.

Basically, we wanted to see what the export and job creation numbers would look like for US companies if China’s regulatory system was more open and transparent.”

The association has been working closely with US Department of Commerce since 2010 on regulatory advocacy measures in China. Crowther said the report would assist the government department in their ongoing conversations with China’s Food and Drug Administration and commerce ministry. 

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