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On December 25, 2025, China’s State Tobacco Monopoly Administration (STMA) released a draft notice titled “Notice on Implementing Policies for the E-Cigarette Industry and Further Promoting Dynamic Balance Between Supply and Demand” for public comments. This follows the State Council’s earlier December guidelines for a full-chain crackdown on illegal tobacco activities—it’s a direct follow-up. The goal? To enforce strict rules on e-cigarettes as a restricted industry, curb the intense “involution” (cutthroat internal competition), and tackle overcapacity.
So, what’s STMA actually doing?
- Controlling new investments: No new e-cig factories allowed. Relocating or restarting production can’t increase capacity, and even tech upgrades at existing sites generally can’t expand output.
- Tightening capacity rules: Approved production limits stay stable—no exceeding them. Compliant companies can merge production sites for restructuring, though.
- Balancing supply and demand: Annual production targets set within approved limits, adjusted based on actual market orders to prevent chaotic competition.
- Fixing overcapacity: Eliminate outdated facilities. Non-compliant businesses get their capacity legally reduced, and high-risk ones face tougher oversight.
- Boosting compliance: Going digital with monitoring and hitting hard on illegal practices, like exported e-cigs flowing back into the domestic market or false customs declarations.
Why now?
China’s e-cig industry already has a solid “1+2+N” regulatory framework (based on the Tobacco Monopoly Law, centered on the E-Cigarette Management Measures and national standards, plus supporting rules). But issues persist: old factories hang on, supply and demand don’t match up, and some exporters skirt the rules. Teen protection and public health remain top priorities—flavored e-cigs and online sales were banned years ago. The late-2025 high-level policy demanded all-around stricter enforcement, so this draft is the response. It’s about legalizing and standardizing the industry to avoid reckless growth.
What do industry folks think?
Companies have to take responsibility and beef up compliance. The comment period runs until early January 2026. Many in the industry say this will accelerate consolidation—shaking out weaker players—but long-term, it should lead to healthier, more sustainable growth. Exporters, in particular, need to stay sharp on complying with destination countries’ laws.
What’s the latest?
The draft is still open for feedback—it’s not law yet. E-cigs in China remain tightly regulated: only tobacco flavors allowed, sales through a unified platform, and strong minor protections in place. The market is becoming more orderly, but if this draft gets finalized, it could further squeeze capacity, increase industry concentration, and impact supply chains and exports.
Vaping Chronicles will keep an eye on this—we’ll update you the second there’s news!