To deepen reforms, dismantle institutional barriers, and unlock the benefits of institutional openness, China (Shandong) Pilot Free Trade Zone Qingdao Area (the Area) recently issued the Implementation Opinions on Facilitating Customs Clearance for Imported MFH Goods in China (Shandong) Pilot Free Trade Zone Qingdao Area (hereinafter referred to as the "Implementation Opinions"). This marks that Qingdao's clearance facilitation reform for medicine and food homology (MFH) goods is entering a 2.0 phase of deepened reform. The Implementation Opinions will enable more small and medium-sized enterprises (SMEs) to benefit from free trade policies through groundbreaking measures like a dynamic pilot product adjustment mechanism, relaxed market access of enterprises, and streamlined approval processes.
It is learned that as early as June 2023, the Area pioneered reforms to streamline customs clearance for the relevant product imports. In collaboration with six municipal authorities, it released the Trial Guidelines on Facilitating Customs Clearance for MFH Goods Imports, along with detailed implementation rules. By introducing an innovative food-use classification mechanism, the Area successfully addressed the longstanding bottleneck where such products were subject to pharmaceutical approval standards due to ambiguous categorization. This breakthrough has established a new pathway for the efficient clearance of this type of goods. Following the reform's implementation, customs clearance time was slashed from 30 days to "immediate release upon declaration", tripling capital turnover for businesses and halving storage costs. The pilot program has demonstrated promising initial success.
During the pilot phase, the Area consistently prioritized enterprise needs by organizing various forums such as enterprise roundtables and business seminars to gather feedback and suggestions. Guided by the principle of "letting corporate demands steer innovation", it integrated local business requirements with best practices from advanced regions. After refining the Trial Guidelines, the Area formulated and enacted the Implementation Guidelines to foster greater openness to new ideas, explore innovative solutions to emerging challenges, and drive institutional reforms that enhance operational efficiency. These measures aim to achieve cost reduction and efficiency improvements, foster the high-quality development of the MFH industry, and advance the Area's high-level opening-up. Specific measures are as follows:
First, it will implement a dynamic pilot product adjustment mechanism.
The Implementation Guidelines introduced a dynamic adjustment mechanism for certain product categories. A dynamic control mechanism has been introduced for two categories of products: 1) Those not listed in the catalog but with substantial market demand and relatively low risks; 2) Those meeting catalog requirements but exhibiting heightened consumption risks due to factors like international circumstances or regional ecological pollution during specific periods. Adjustments (additions/removals) shall be made after comprehensive assessments of demand and risks, incorporating feedback from relevant stakeholders and experts. This dynamic mechanism addresses the sluggish updates of the original catalog, facilitating imports of high-demand, low-risk non-catalog goods. Simultaneously, it implements a rapid-response exit mechanism for products impacted by ecological pollution or global environmental shifts. The pilot program's dynamic pilot product adjustment mechanism enhances safety and controllability by scientifically defining the scope of pilot varieties and strengthening risk warning management.
Second, it will substantially ease market entry requirements for enterprises.
The mandatory threshold of the RMB 10 million trade volume for trading enterprises will be abolished, while the scope of affiliated enterprises will be broadened, extending downstream affiliates from solely processing firms to diverse production and operation entities, thereby expanding policy coverage to more enterprises. For manufacturing and processing enterprises, the requirement of annual output value exceeding RMB 5 million will be scrapped, with geographical constraints eased by extending eligible operational sites from Huangdao District to the entire city of Qingdao, attracting more high-quality enterprises to cluster. With relaxed entry criteria, micro, small, and medium enterprises (MSMEs) will no longer be constrained by trade scale, enabling enterprises with specialized capabilities but smaller sizes to join the pilot project. This fosters diversified competition in the MFH market, cultivates innovation and industrial chains for such products, accelerates new quality productive forces in this sector, and facilitates cross-border supply chain integration, thus further creating an efficient and convenient port business environment.
Third, it will optimize and reconstruct the approval service workflow.
The original "review for every single issuance" model, which required seeking approval from higher authorities for every issuance of usage certificates, has been streamlined. To be specific, pilot enterprises now submit applications collectively, and the Area conducts joint evaluations. For approved enterprises importing pilot products, the approval management authority directly handles the acceptance, review, and issuance of the Certificate of Use for Imported MFH Goods. By streamlining approval procedures, operational efficiency is significantly enhanced, enabling faster and more convenient processes for pilot enterprises while further reducing institutional transaction costs. The approval timeline is shortened from 10 working days to within 3 working days, with most cases finalized on the same day, barring exceptional circumstances.
The 2.0 version of the customs clearance reform for MFH goods relaxes market access and introduces an innovative "commitment system + full-chain traceability" regulatory mechanism. Centered on credit management, this system establishes a comprehensive tracking framework covering pre-commitment, in-process verification, and post-traceability. While emphasizing the primary responsibility of pilot enterprises, relevant authorities enhance coordinated oversight to implement end-to-end supervision of imported MFH goods across circulation and production domains, maximizing risk prevention and control measures.
Moving forward, the Area will intensify reform effectiveness by embracing bolder innovation and exploration. Through digital intelligent product origin tracing for MFH goods solutions, it will enable "one product, one code" full-chain supervision and leverage its advantages as a reform pioneering area to unlock new dynamism in cross-border trade.
