China's E-Cigarette Boom Lacks Oversight For Safety: Report

A review by The Times of manufacturing operations in Shenzhen, a booming city in southern China, found that many factories were legitimate and made efforts at quality control, but that some were lower-end operations that either had no safety testing equipment or specialised in counterfeiting established brands, often with cheaper parts.

Chinese companies were the first to develop e-cigarettes, and that happened in a regulatory void. In the U.S., the Food and Drug Administration (FDA) has just begun to move toward regulating e-cigarettes, working on rules that would force global producers, in China and elsewhere, to provide the agency with a list of ingredients and details about the manufacturing process.

But analysts say setting those rules and new manufacturing guidelines could take years. In the meantime, Chinese factories are quickening the pace, hoping to build profits and market share before regulatory scrutiny arrives and most likely forces many e-cigarette makers to close.

"This is really a chaotic industry," says Jackie Zhuang, deputy general manager of Huabao International, a Chinese tobacco flavouring company in Shanghai and an expert on China's e-cigarette market.

"I hope it will soon be well regulated."

In a five-square-mile area in the northwestern part of Shenzhen called Bao'an, in a district packed with industrial parks, there are believed to be more than 600 e-cigarette producers, and many more component suppliers selling bulk orders of tube casings, integrated circuit boards, heating coils and lithium ion batteries, the essential components of the e-cigarette.

If you are a manufacturer in Shenzhen and need 50,000 baked-metal casings, a local manufacturer can supply them for about USD 25,000 and have them delivered within hours.Unlike the counterfeiters' shops, the largest Shenzhen e-cigarette manufacturing operations are relatively clean, with rows of workers seated on plastic stools along a fast- moving assembly line.

In 2004, a Chinese pharmacist named Han Li helped develop the e-cigarette, which was then sold through his company, Beijing Ruyan. Other manufacturers soon followed, and by 2009, as e-cigarettes became more popular in the United States and Europe, more factories opened.

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