• Inner Mongolia Yili Industrial Group Co Ltd leads the organic segment in China with a value share of 27.9% in 2021, followed by China Mengniu Dairy Co Ltd with a value share of 12.9% and Nestle SA with a value share of 9.5%.
• China continues to show organic growth above the regional and global averages, posting a 13.3% expansion in 2021. A positive growth pattern is expected to continue, with China averaging a CAGR of 7.1% the forecast period 2021-2026.

• Organic products in China recorded a market size of US$4.8 bn in 2021, representing roughly 8.0% of global demand. However, a per capita expenditure of US$3.40 indicates organic products in China are still a relatively niche category. 
• With an increasing emphasis on the importance of organic products among the younger generation and a rise in demand for organic baby food due to the growing number of mothers in the workforce and the increasing adoption of the health and wellness trend, organic products are expected to record strong growth in China, registering a value CAGR of 7.1% for the forecast period 2021-2026, reaching a total of US$6.4 bn by 2025.

• Rising demand was seen for good quality and healthy products due to Covid-19 in 2021, leading to a stronger performance for organic packaged food. Organic baby food was a highlight, growing 15.6% in the year.
• Organic packaged food saw 13% growth in retail current value in 2021, to reach US$4.7 billion. The category expected to see a current value CAGR of 5.3% over the forecast period, to reach a value of USD$6.3 billion in 2025.
• Organic beverages saw 11% growth in retail current value to reach USD$68.4 million in 2021.

• Organic baby food has remained the largest category within organic packaged food in 2020, with organic milk formula achieving the highest sales and also seeing exceptional growth. Chinese parents have been careful with the products they give their children and are happy to spend more if necessary. However, it is not necessarily the organic nature of these products which attracts parents. Organic baby food has an advantage mainly due to its premium positioning, because parents believe if they pay a higher price, they are getting better quality. 
• Organic beverages remain by far the smallest category within health and wellness beverages in China, due mainly to weak consumer awareness. Sales of organic soft drinks are not notable in China, with organic hot drinks remaining dominant, and within this, sales are exclusively of organic tea, mainly organic green tea.
• One of the barriers to the production of organic beverages in China is the high costs involved. To obtain organic certification, no chemical synthetic substances should be used in pesticides, herbicides, fertilisers, or other additives used for the growing of ingredients. According to national standards, it takes at least three years to obtain a certificate. Even with all these factors in place, certification is only valid for one year, and requires an annual inspection to retain the label, with organic certification sometimes revoked. Most players do not consider it to be worth the effort and cost involved.

• Increased attention to safety and high-quality standards considering the spread of Covid-19 has increased sales of organic milk. The category has also been stimulated by product innovation. Leading player Inner Mongolia Yili Industrial Group launched organic milk with zero fat under its brand Satine, catering to the demands of young women. It also offered organic milk for children in a small pack. The brand comfortably leads the organic landscape in China, with 28% market share. Chinga Mengniu Dairy Co holds a distant second place with 13% share.
• Manufacturers have been keen to launch organic milk formula to cater to parents’ needs. For instance, in March 2020 Junlebao launched organic milk formula with hydrolysed protein and probiotics to help digestion. Danone also added a new organic milk formula to its portfolio, Aptamil Essensis 3, which contains A2 protein and serves as a super premium offering. In addition, Heilongjiang Feihe Dairy launched super premium organic milk formula in October 2020 to enhance its organic offering.
• Traditional tea brands are now attempting to explore organic tea. For example, leading international tea player Unilever China attempted to introduce its Pukka brand of organic tea into the Chinese market in October 2020, featuring products for acne treatment, soothing nerves, and detoxification.

• Organic baby food is set to see the strongest growth, extending its lead in the category. As parents are particularly concerned about the quality of the food they give their children, more are likely to turn to organic baby food. Nevertheless, all organic packaged food categories are expected to see both retail volume and current value growth in the forecast period.
• Although organic dairy is forecast to see a retail volume decline in 2021, offsetting the growth seen in 2020, the category is expected to return to strong growth over the following years. This explains Inner Mongolia Mengniu Dairy Industry (Group)’s optimism and its continued investment in organic dairy. For instance, it has increased its investment in China Shengmu, and become the largest shareholder in this organic dairy company. This is expected to help Mengniu gain share within organic milk, drawing closer to the leader Inner Mongolia Yili Industrial Group, and will also aid in the development of new products.

• The National Health Commission’s “Healthy China 2019-2030 Initiative” sets out the “Three Reduce, Three Health” plan to advocate healthy lifestyles. One of the elements of the plan is to reduce the intake of sugar in both packaged food and beverages. Although China has not imposed sugar taxes on the food and beverage industries, unlike many other markets, the release of the plan was also seen as encouragement for manufacturers to develop reduced sugar and sugar-free products.
• Although rising from a low base, the organic segment is expected to perform particularly well in both packaged food and beverages in the forecast period. Higher-income consumers are increasingly looking for better quality in the products they purchase. They tend to believe that higher prices indicate higher quality, and therefore they are increasingly selecting organic products, as these carry higher prices. However, they are choosing them due to the belief that they are high quality, not necessarily because they are organic.

Economy: 

• Following real growth of 8.9% in 2021, China’s economy is expected to expand by an average annual real rate of 4.1% over 2022-2040.
• Inflation in China is forecast to increase to 2.2% in 2022 from 1.0% in 2021.
• As China’s exports increased by 31.1% during 2021, the country’s trade surplus reached record-high levels.
• FDI inflows in China continued to grow and reached an all-time high of US$179 billion in 2021, supported by strong investment in hi-tech and services sectors.
• Public debt levels in China increased slightly to 67.6% of GDP over 2021, standing below the regional average of 94.7%.

Population demographics: 

• China’s population will peak in 2029, but after this point deaths will overtake births resulting in depopulation every year up to 2040. When China’s population reaches nearly 1.4 billion in 2040 it will be the second largest country globally, after being surpassed by India in 2026.
• Extremely low fertility and diving birth rates, as well as climbing longevity, ensure that the ageing trend accelerates up to 2040. Rapid expansion of the 70+ age cohorts of over 100% in 2019-2040, alongside declines in most age groups under 60 years, will result in a transformation of consumer trends.
• Eight of China’s ten major megacities will experience overall population growth in 2019-2040, except for Shanghai and Beijing. Dongguan is set to grow the fastest, influenced by its high-tech transformation.

Income & expenditure: 

• Per capita gross income in China is forecast to increase by 153% in real terms over 2021-2040.
• Young adults are projected to become predominant in the top-income band by 2040, shaping luxury spending patterns in China. 
• Income inequality is estimated to increase over the long term and remain extremely high by global standards.
• The Guangdong region is anticipated to remain the largest consumer market in China by 2040, accounting for 11.1% of total consumer expenditure.
• Housing is forecast to be the largest consumer spending category in 2040, while hotels and catering will record the fastest growth over 2021-2040.
• Over the period 2020-2030, China is projected to increase by seven positions and rank 16th out of 84 countries in Euromonitor International’s Wealth Index.

Top 5 Cities By Population

Top 5 Grocery Retailers By Sales

Top 5 Export Commodities To China

Note : Total organics is the sum of all exports in a particular year  

Authorized Government Agency(s):

Standardization Administration of China (SAC) and the General Administration on Quality Supervision, Inspection and Quarantine (AQSIQ).

Agency(s) Contact Information:

Standardization Administration of China
No. 9 Madian East Road
Haidian District
CN-Beijing 100088
Tel: +86 10 8226 2622
Fax: +86 10 8226 0660
E-mail: sac@sac.gov.cn
Web

General Administration of Quality Supervision, Inspection and Quarantine
No. 9, Madian East Road
Haidian District
Beijing100088
People's Republic of China
Web

Name(s) of Regulation and/or Standard:

National Standards for Organic Products, GB/T 19630-2005 were updated in 2011 to National Standards for Organic Products, GB/T19630-2011.

GB/T19630-2011 consists of 4 parts:
GB/T19630.1 Organic Products: Production 
GB/T19630.2 Organic Products: Processing 
GB/T19630.3 Organic Products: Labeling and Marketing 
GB/T19630.4 Organic Products: Management System 

USDA has published an unofficial translation of Implementation Rules for Organic Product Certification

Date of Implementation: 2005

Regulation and/or Standard Scope:

The Chinese standard covers the general specifications and requirements for organic production, processing, transport, storage and packaging of crops, edible fungi, wild plants, livestock and poultry, aquatic products, textiles, and apiary.

China will begin new organic national standards for organic products and new regulations for certification and use a revised eligible products list on January 1, 2020. Products marketed in China as organic must comply with this standard and accompanying regulations.
 
The new organic standard includes changes to production and processing inputs, such as adding microbial preparations for control and prevention of animal diseases, adding detergents and disinfectants in plant production, adding requirements for packaging materials for feed products, adjusting lists of food additives, processing aids, and feed additives eligible for organic production and/or processing. The standard also changed the requirements for the labeling of organic conversion products. 

The new organic certification rules appear to have streamlined some certification practices. For example, an overseas organic production site which has been certified organic certification for at least four years can be waived from a 12-month organic conversion period before being certified to the Chinese organic standard. And if an organic product is produced or processed overseas, the product sample can be tested by a local testing agency. Site inspection requirements have also been simplified.

China does not allow equivalence agreements with other countries. US producers, even though they are USDA certified, will not be allowed to use the Chinese term for organic unless they receive Chinese certification. See the reports in Additional Information below for more detailed information about meeting China's requirements for imported products.

China’s General Administration of Quality Supervision, Inspection and Quarantine (AQSIQ) plans to require importers of certain products to a review overseas exporters and producing enterprises. See the GAIN report.

Certification:

United States Department of Agriculture Foreign Agriculture Service UNOFFICIAL translation of certification rules .pdf (2012)

There are local and foreign certifiers available.
Two major Chinese certifying organizations: China Organic Food Certification Center (COFCC) and Organic Food Development Center (OFDC).
Joint-venture companies: BCS (Changsha); ECOCERT (Beijing); Japan Organic and Natural Foods Association (JONA) and Overseas Merchandise Inspection Company

Requirements for Foreign Certification Body (CB):

- Regulation on Certification and Accreditation (Decree No. 390 of the State Council of PRC) Requirements for all CBs, plus extra requirements for foreign CBs
- Requirements on approval of CBs (RMB 3 M, 10 full-time staff...)
- Foreign CBs must be accredited in its own country
- Foreign CBs must have organic experience over three years

Accreditation Method:

Government

Accreditation:

Certification and Accreditation Administration of China (CNCA)

China does not allow foreign assessment bodies, such as USDA, to accredit certifiers.

Reference Standards:

https://apps.fas.usda.gov/newgainapi/api/Report/DownloadReportByFileName?fileName=2019%20Official%20Exporter%20Guide_Shenyang%20ATO_China%20-%20Peoples%20Republic%20of_12-30-2019

Additional Information:

Food importers must register every four years. See GAIN Reports below for more information.

USDA's GAIN Report China Publishes New Organic Standard and Certification Rules (2019)

USDA's GAIN Report Update - US Pet Food is Poised to Expand in the China Market (2022)
USDA's GAIN Report GACC Updates Decree 248 Product List (Feb. 2022)
USDA's GAIN Report Verifying Decree 248 Facility Registration Information (2022)
USDA's GAIN Report Update to Imported Dairy Product Inspection and Quarantine Requirements (2022)
USDA's GAIN Report Administrative Measures on Import and Export Food Safety - Decree 249 (2021)
USDA's GAIN Report Overseas Facilities Registration Regulation - Decree 248 (2021)
USDA's GAIN Report Decree 248 - FDA Constituent Update (2021)
USDA's GAIN Report Decree 248 Single Window User Manual and Training (Dec. 2021)
USDA's GAIN Report Decree 248 Information Update (Dec. 2021)
USDA's GAIN Report Decree 248 HS Codes Published in GACC Single Window (Dec.2021)
USDA's GAIN Report GACC Issues Interpretation of Decree 248 (Nov. 2021)
USDA's GAIN Report Decree 248 Unofficial Self-Registration Guide for Overseas Food Facilities (Nov. 2021)
USDA's GAIN Report Decree 248 Foreign Facilities Self-Registration Website Launched (Nov. 2021)
USDA's GAIN Report China Releases Draft General Standard for the Labelling of Prepackaged Foods for Domestic Comments (2020)
USDA's report on the 2015 Food Safety Law
USDA's GAIN Report China Implements Food Safety Law Implementing Regulations (2019) Includes unofficial translation.
USDA's GAIN Report Smart Consumers and ‘New Retail’ drive China’s Food Retail Sector (2019)
USDA's GAIN Report China Retail Foods Change and Opportunity (2018)
USDA's GAIN Report China Passes E-Commerce Law (2018)
USDA's GAIN Report Exporter Guide to China (2022)
USDA's GAIN Report Consumer Study on China's Imported Food Products (2018)
USDA's GAIN Report Retail Foods Report (2021)
USDA's GAIN Report Snack Food Market Overview (2021)
USDA's GAIN Report Organic Certification Issues Update from East China
USDA's GAIN Report AQSIQ to Require Importers to Review Overseas Food Producers 
USDA's GAIN Report Food Processing Ingredients (2022)
USDA's GAIN Report Retail Increasing Change and Competition but Strong Growth Presents Plenty of Opportunities for U.S. Food Exports (2017)
USDA's GAIN Report Food Service Hotel-Restaurant Institutional (2022)
USDA's GAIN Report China Retail Foods Change and Opportunity (2018)
USDA's GAIN Report Macau Food Retail Industry (2018)
USDA's GAIN Report The Notice on the Technical Review of Relevant Standards for Imported Foods Without Applicable National Food Safety Standards (2020)
USDA's GAIN Report Food and Agricultural Import Regulations and Standards Export Certificate Report (2022)
USDA's GAIN Report Food and Agricultural Import Regulations and Standards Country Report (2022)

Hong Kong does not have a law regulating organic food products.  U.S. organic products can be sold in Hong Kong with the USDA organic logo. See the Global Organic Trade Guide's page for Hong Kong for more information about this Special Administrative Region of the People's Republic of China.

In September 2016, US shipments are subject to China's requirements designed to halt the spread of Zika-bearing mosquitos.