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 The Ministry of Industry and Information Technology (MIIT) and
China's State Tobacco Monopoly Administration, posted online the
draft regulations that could potentially curb a fast-growing
industry.
In 2019, a string of Chinese e-cigarette companies emerged targeting
the domestic market, following the overseas success of the Juul.
The most successful among them, RLX Technology Inc, raised $1.4
billion in an IPO in January that valued the company at $35 billion.
RLX Technology did not immediately respond to a request for comment.
A huge market of smokers and its large electronics manufacturing
industry makes China a promising market for the e-cigarette
industry.
Yet the sector exists in precarious regulatory area.
China's tobacco industry is controlled entirely via a government
monopoly, and strict controls determine what companies and retailers
can produce and sell cigarettes.
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 Cigarette sales generated 5.45%
of China's overall tax revenue in 2018. For this
reason, industry experts have long expected the
state to intervene in the business operations of
China's private e-cigarette companies.
In November 2019, Chinese regulators forbid
e-commerce platforms from selling e-cigarette
products online. The ban swiftly curbed the
growth of the sector, and many brands focused
their business toward offline sales.
(Reporting by Josh Horwitz and Yilei Sun,
editing by Louise Heavens)
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