W ith the increasingly large size and forward momentum of China’s economy， one would think there has to be a well-developed dietary supplement industry. However， although China has been posting record gains to its GDP， it is far behind the U.S.， E.U. and Japan in regard to a well-defined and prosperous dietary supplement industry. With that said， having an established dietary supplement industry is not the measure by which countries are judged in terms of economic prowess. Nevertheless， havng one does refl ect a larger percentage of consumers with expendable income seeking a healthier life， which China is n the process of building. One positive sign of China’s consumer growth was the recently released consumer spendng indicators for March 2011 from China’s National Bureau of Statistics. Year on Year comparison of spending on retail consumer goods grew 17.4 percent and consumer confi dence index was at its highest point since July 2010. Compare these stats with the rest of the world and you’ll see that China is rapidly transforming into the largest consumer market in the world.Although there is a growing consumer base and a need for dietary supplements in China， the demand s currently under-developed. For example， many Chinese consumers are not accustomed to taking pills or tablets on a daily basis. The older generation n China is especially unfamiliar with dietary supplements. For example， my wife is Chinese and her mom lives with us here in Beijing. In the past， my mother in law has never taken dietary supplements for two reasons， fi rst they weren’t available while she was growing up and second she was not introduced to the important role supplements play in maintaining health. However， I’ve had the chance to inform her about the value of taking dietary supplements on a daily basis. She now takes a multivitamin， a calcium tablet and a fi sh oil capsule everyday. Over a year has past since she began taking supplements. She now has more energy and feels much healthier than before. With this renewed feeling of energy and health， she has become a very busy lady. She enjoys acting in local Beijing TV dramas and has been on many cooking shows on both CCTV and BJTV. She is also an avid singer performing in public at ceremonies and holiday occasions. Many of her schoolmates have seen the change and are now interested in taking dietary supplements to keep them healthy and active as they grow older.Because of the Internet， the younger generation is much more informed about dietary supplements. Young ladies especially are very interested in buying dietary supplements that help with keeping their skin young and beautiful as well as supplements that assist with weight loss. Young men are also keen on buying products that can help them excel in sports and assist with increasing their strengthen and muscle mass. Over the last six years I’ve lived in Beijing， I’ve certainly seen an increase of young men lifting weights and consuming protein powders and other dietary supplements to help them build muscle.I’d like to clarify what dietary supplements are and why we should take them. According to U.S. law， dietary supplements are vitamins， minerals， herbs or other botanicals， amino acids， and substances such as enzymes， organ tissues， glandulars， and metabolites. One very important aspect to remember about dietary supplements is they are not designed to treat or cure disease， they are in fact taken on a daily basis to supplement the diet and increase nutritional intake. A balanced diet is very important to maintain a healthy life. However， as families become busier with life and work， they tend to skip meals or eat foods that are fast and convenient， but lack high levels of nutrition. For example， I see many people here in Beijing eating youtiao（油條）， baozi（包子）， jianbing（煎餅）， guanbing（灌餅) or a simple piece of steamed bread（饅頭）with soy milk（豆漿） for breakfast as they rush off to work. Although these are tasty foods and I also enjoy eating them especially baozi， they lack many essential nutrients. T is is where dietary supplements play an important role in supporting health and nutrition for the entire family. By eating the types of foods listed above for breakfast together with a multi-vitamin loaded with vitamins， minerals and antioxidants we can be assured our breakfast is nutritionally more balanced.Although China’s consumer base is expanding and there is a growing demand for dietary supplements， why isn’t the industry growing much faster? The short answer is strict government regulations and a shortage of widespread education on dietary supplements and the role they play in health maintenance. Current government regulations require large investments of both time and money to achieve market approval from China’s State Food and Drug Administration (SFDA). The product registration process can take up to 2 years and cost upwards of US$ 50，000 per individual product， so for a company that has 30 diff erent products， which is typical in the U.S. market， they would have an up front investment of US$ 1.5 million just for registrations and then have to wait two years before they could start selling. T e bulk of the estimated US$ 50，000 is actually paid to a registration consultant that assists the company to successfully navigate the registration process. At this point， consultants are necessary due to the complexities involved in the registration process. T e process is rigorous and requires tests such as human and animal testing at state approved laboratories. Because SFDA’s current regulations pose large hurdles for companies， many foreign and domestic companies choose not to invest in China’s dietary supplement industry， which of course stifles industry growth. Furthermore， because the industry is being held back， so to is the spread of education. If we take a look at the U.S. market for dietary supplements， about 40 percent of supplements are sold at thousands of health food stores across the U.S. Another 30 percent are sold at supermarkets and the remaining 30 percent are sold through direct sales (multi-level marketing)， doctors and Internet. In contrast， the China market does not have a developed health food store channel and the amount of dietary supplements found in supermarkets is very low. T is observation shows us if China reformed the current regulations to be more like the U.S.， the potential growth in China would be enormous. However， we must first see regulatory change take place， which will encourage the health food store and supermarket channels to begin to establish themselves.China’s dietary supplement industry or “the healthy food products industry” as it is known has been the center of attention over the last few years among industry organizations and government officials. SFDA together with a variety of industry experts and organizations including China Health Care Association （中國保健協會）have been working to create a more transparent and clear regulatory system that will allow the industry to develop further and at the same time protect consumers from counterfeit or dangerous products.It is hoped that SFDA moves the industry toward a more open system of notification instead of registration. I would like to defi ne what I mean by notification compared with registration. In the U.S.， the Food and Drug Administration requires manufacturers of dietary supplements to “notify” FDA of their manufacturing site and the products they intend to sell including all the ingredients. FDA recognizes dietary supplements as food supplements， which allows manufacturers to combine them in a variety of ways. For example， one company might have a multi-vitamin with 10 ingredients and another company might have 35 ingredients. As long as all the ingredients are approved dietary supplement ingredients， the manufacturer is free to combine the ingredients in a way their scientifi c team feels is nutritionally most effective. If an ingredient is not yet approved， then the company has to submit all historical and scientifi c data on the ingredient to U.S. FDA. Within seventy-five days， U.S. FDA will make a ruling on if the ingredient is safe and fi ts the classifi cation of a dietary supplement. Because dietary supplements are derived from food there is no need to do clinical trials such as animal and human testing. T is notification process is free of charge， which helps manufacturers keep costs down and in the end saves consumers money. In contrast to this system， is the registration system， which we already know is very expensive， time consuming and requires testing of ingredients that are already known to be safe and benefi cial for human consumption.Since this article is promoting China’s SFDA to move the dietary supplement industry more towards the U.S. system， let us take a brief look at the U.S. market. The U.S. dietary supplement industry can be traced back over 100 years ago， but it really began to develop after 1994 when the U.S. government passed the “Dietary Supplement Health and Education Act” (DSHEA)， which clearly defined dietary supplements， it allowed the widespread education of dietary supplements and increased access to supplements for consumers. As a result， DSHEA encouraged investment in the industry especially in the areas of research and development. Currently， the U.S. dietary supplement market is the largest in the world and is worth over US$ 27 billion. T e industry offers over 60，000 products to U.S. and global consumers and over 200 million Americans consume dietary supplements on a daily basis. The size and success of the U.S. dietary supplement ndustry is due to a number of factors including regulations based on notification not registration， quality and eff ectiveness of the products， consumer demand for healthier lifestyles， and increased savings on healthcare expenditures. The law maintains a rational approach to the use of scientifi c knowledge for structure/function claims by recognizing a diverse group of global scientific sources (i.e. NIH Studies， Commission E monographs， university studies etc.).U.S. and Chinese manufacturers and suppliers would benefi t equally from a regulatory shift in Chinese law toward notification and recognition of the dietary supplement industry as a food based industry being separate and distinct from the pharmaceutical ndustry as well as one that is based on the approval of ingredients not product formulas.T is would not only increase business opportunities for Chinese suppliers and distributors， but also benefit Chinese consumers by providing access to an expanding range of aff ordable domestic and imported dietary supplements that promote health and wellness.If China’s regulatory system moves towards a system of notifi cation， the benefits to government， industry and consumers will be substantial. One such benefi t would be savings in health care expenditures. T e Chinese government has spent a great deal of time and money reforming the medical system to become more preventative in nature. If dietary supplements become more readily available in potencies that refl ect the latest in scientific and nutritional research， dietary supplements will compliment these eff orts by promoting health and lifestyle changes for Chinese consumers. These savings have been clearly documented in the U.S.For example， an October 2007 report in the U.S. peer-reviewed publication Nutrition Journal concluded that the health of people who used dietary supplements was better than non-dietary supplement users. Furthermore， the Lewin Group， a U.S. healthcare and human services research group， reported that dietary supplements were responsible for saving the U.S. government US$ 20 billion in medical expenses. Studies concluded that senior citizens taking 1，200mg. of Calcium with Vitamin D daily would save US $16.1 billion， women of child bearing age consuming 400mcg of Folic Acid daily would save US$ 1.4 billion and seniors taking 1800mg. of Omega-3 Fatty Acids per day would save US$ 3.2 billion.In addition， an economic study was conducted to record the impact the dietary supplement industry has on the U.S. economy. Although the dietary supplement industry generates over US$ 27 billion a year in sales， its overall contribution to the U.S. economy exceeds US$ 60 billion or 0.5 percent of U.S. GDP. Some of the study’s detailed fi ndings include: total tax contribution was US$ 10.1 billion (US$ 5.3 billion to federal and US$ 4.8 billion to local/ state); for every US$ dollar spent by the industry， US$ 2.71 is contributed to the U.S. economy and the industry is responsible for creating approximately half a million jobs across 100 diff erent industries. The report was completed by Dobson/DaVanzo， a Washington， D.C.-based economic research firm. T e study utilized factors such as: supply， production， research， direct employment， manufacturing， and taxes.Although China’s regulatory system has not made signifi cant movement over the last few years， it is hoped that by the end of this year there will be some signs of headway. Regardless of the slow progress， those in China involved in the industry including myself all envision a bright future. Chinas dietary supplement industry has great potential and a growing number of consumers are interested in purchasing products that will enhance their overall health. Regulatory reform will expand China’s dietary supplement market benefiting both domestic and U.S. enterprises and will allow China to surpass the EU， Japan and the U.S. to become the largest market for dietary supplements in the world. Free and open access to dietary supplements benefi ts the government， the industry and most importantly consumer’s health. Furthermore， supporting industry expansion will create jobs， generate more tax revenue as well as support existing Chinese industries such as retail， shipping， distribution and research and development.(Author: CEO/Executive Director of U.S. – China Health Products Association )
