Deciphering China's Regulatory Path and Possibilities for Cell-Cultured Meat
Updated: Jan 19
By Tao ZHANG, Co-founder of Dao Foods and Rouyu WU, Director of Investment and Innovation, Dao Foods
Following Singapore's approval for Eat Just's first cell-cultured chicken in December 2020, Upside Foods received a "No Questions" letter from the US Food and Drug Administration (FDA) on the safety of their cultivated chicken in November 2022. Both events have generated some excitement in China's alternative proteins sector.
With the letter signaling that the FDA has accepted Upside's conclusion that products derived from Upside’s cultivated chicken cells are safe to eat, we agree that the decision marks a key milestone for cell-cultivated meats to become available in US supermarkets and restaurants. At the same time, Dao Foods remains cautiously optimistic about the regulatory prospect for cell-based meat products in China, even though we are a minor shareholder of Upside Foods (via its acquisition of Dao Foods portfolio company Cultured Decadence) and have invested in Chinese cell-based company NewDay Farm.
In January 2022, Time reported on the release of China's Ministry of Agriculture and Rural Affairs' five-year agricultural plan, highlighting the fact that cultivated meats and plant-based products could be part of the country's approach to food security in the future. "It's promising, but let's not get too excited yet," says an article Dao Foods authored in reaction to this Time article.
"For one thing, it's early, and reading the tea leaves of ever-evolving China policy is an ongoing process that takes time, patience, and consistency of effort and attention. Decades of experience in China tell us this, and it will be no different for alternative protein," adds the article.
Later on, Dao Foods authored another article to comment on the remarks made by Chinese President Xi Jinping in March 2022, during which President Xi mentioned the need for China to develop new proteins, especially from plants and microorganisms.
We believe that this is another welcome development and a signal that China's highest levels of government have started to pay attention to the diversification of protein production. At the same time, it's still early, and we must wait to see how this high-level narrative translates into concrete and valuable policies that assist entrepreneurs and innovators on the ground.
For the same reason, we do not suggest that we rush to translate what has happened in the US and Singapore into what could happen in China from a regulatory perspective. Below, we try our best to explain China's regulatory situation in more detail.
Existing Regulatory Pathway for Cell-Cultured Meat
First, let's step back and examine the existing Chinese regulatory pathway that could apply to cell-based as a novel food ingredient.
China has not proposed new regulatory policies and guidelines for cell-based meat. So, we must assume that the regulatory pathway should still be based on the existing framework, but further updates or supplements are certainly not ruled out for this framework. Of course, we also don't rule out the possibility that China's policymakers will establish a separate legal and regulatory framework just for cell-cultured meat, depending on how strategic the government would perceive this kind of novelty product or ingredient.
According to existing regulations and rules, food ingredients with no history of traditional consumption are considered novel food ingredients. Novel food ingredients are as follows: 1) animals, plants, and microorganisms; 2) components isolated from animals, plants, and microorganisms; 3) food ingredients whose original structure has been changed; 4) other newly developed food ingredients. Our understanding is that cell-cultured meat would belong in the fourth category.
Please click here for the Chinese government's website link (in Chinese though) on approving novel food ingredients. The government entity responsible for such approval is the National Center for Food Safety Risk Assessment (CFSA) under the National Health Commission. Exhibit of this article maps out the regulatory approval process for novel food ingredients.
The National Health Commission is China's equivalent of the FDA. At a webinar organized by the AgFood Future Center of Excellence (AGF) on December 22, Ms. SONG Yan, Director of Division III Risk Assessment of the National Center for Food Safety Risk Assessment, attended and spoke. AGF also invited Jeremiah Fasano, senior policy advisor at the US FDA’s Regulatory Review Office, to participate in the webinar, where he shared insight on the Upside Foods case.
On the webinar, Ms. Song emphasized the necessity of a "case by case" safety assessment approach. Ms. Song pointed out at the call that their work focus in 2023 will be on the risk assessment of cultured meat (cultured cells). Interestingly, the U.S. FDA has been using the same “case by case” approach for regulation and approval of cell-cultured meat, which seems to be the methodology that CFSA intends to replicate for home-grown and international cell-based companies in China. By contrast, according to China’s current novel food ingredients regulations, as long as companies go through the application process and obtain approval, they can start to produce and even sell such products in the market. Such dichotomy makes us believe that China’s regulatory authorities may want to take cues from the US along the way to assess consumer acceptance of such novelty food products and watch out for food safety and related social risks that they should be chiefly concerned with.
At the webinar, CFSA also encouraged companies to start communicating with regulatory authorities and familiarize themselves with relevant regulations in advance. At this point, at least based on the suggested “case by case” approach, there remain quite some unknowns, e.g. what contents/materials the government would request to review, and what kind of risk assessment report is suitable for cell-cultured meat as a novel food ingredient.
The reality or the perception is that the production process of cell-cultured meat may involve food additives and genetically modified organisms (GMO), the latter of which is particularly disallowed for food for human consumption in China. A notable example on this front is Impossible Foods who has had a hard time entering the China market over the past years mainly because of Impossible’s use of GMO technology for the key ingredient heme, a molecule that makes the Impossible Burger “bleed.” So for novelty food ingredients associated with GMO, the current relevant regulations may include but are not limited to: "Administrative Measures for New Varieties of Food Additives," "Guidelines for Safety Evaluation of Genetically Modified Animals," "Approval Measures for Agricultural Transgenic Bioprocessing," "Regulations on the Safety Management of Agricultural Genetically Modified Organisms," "Administrative Measures for the Labeling of Agricultural Genetically Modified Organisms," and "Guidelines for Safety Evaluation of Genetically Modified Animals"; and other regulations on the management of genetically modified products.
According to the government agencies corresponding to the regulations mentioned above and the division of powers and responsibilities, the relevant regulatory bodies of cell-cultured food may include but are not limited to: the National Health Commission (comprehensive food safety supervision, food safety standards), State Administration for Market Regulation (food licensing review, food safety supervision, trademark advertisement supervision), the Ministry of Agriculture and Rural Affairs (agricultural product quality and safety supervision, oversight of agricultural genetically modified organisms such as plants, animals and animal microorganisms).
Other Possibilities and Options
Based on the existing regulatory infrastructure that could apply to approval of cell-based meats in China, cell-based meat companies, if their products are considered GMO, would need to clear regulatory hurdles at all these government agencies before they can go to market. At this point, we can only guess the proper sequence for all these regulatory steps since there is no designated government body responsible for streamlining and supervising this process. Given the seemingly complex maze that looks quite hard and time-consuming to navigate, we believe stakeholders in this field, including cell-cultured meat companies, should call for a separate and more straightforward regulatory pathway.
As of December 2022, approximately 10 companies are developing and producing cell-cultured food in China, based on Dao Foods’ knowledge. Chinese companies are still behind some of their counterparts in the West, especially the US, in terms of product maturity and scale. However, learning from the electric vehicle sector and given the protein security challenge China will be confronted with over the coming decades, we see a chance that China's new protein industry can still advance quickly with the proper policy support, and innovative home-grown companies are undoubtedly eager to try. Therefore, industry policy and supervision have become indispensable and essential and are the cornerstone to promoting the development of the industry. It also helps new protein companies to strategize and make long-term plans accordingly.
Since 2020, CFSA has begun to pay attention to the situation of cell-cultured meat and have carried out quite some work. They have been actively participating in international conferences and tracking global trends and new technologies through participating in international events, promoting special research projects, and setting up working expert groups. Government workers at the operational level have conducted risk assessments and surveys to understand consumers' acceptance of alternative proteins.
On the December 22 webinar, Ms. Song did encourage companies to start communicating with regulatory authorities and familiarize themselves with relevant regulations in advance. Nonetheless, none of the cell-cultured meat companies in China or beyond has applied under the existing regulatory framework. Standing in the shoes of these companies, aside from the early development stage of their products and scale, it may also have to do with the uncertainty they see regarding the approval process. For example, how much time they will need to spend pursuing the existing pathway, and what materials they need to put together for this purpose.
Dao Foods does not think cell-based meat companies need and want the Chinese government to create a new agency or procedure for their products. This scenario would unnecessarily prolong the process these companies must go through, reducing the commercial viability of cell-cultured foods as perceived by the investor community at large. However, the reality is that a brand new or supplementary regulatory /policy framework remains a possibility just for cell-cultured meat, especially if they are considered GMO, more from a government perspective. The reason could be: given China's top-down governance approach, government officials at the working level may find the inherent social implications hard to grasp and do not want to bear the responsibility alone that comes with it. Additionally, before this happens, it is not uncommon for every industry to have group/industry standards as foundational work. Therefore, we tend to think that there may well be a need for government-endorsed and reasonable group/industry standards to be in place first, another layer of action that seems to be lacking at this point and could be time-consuming as things evolve.
Dao Foods Action in Cell-Based
Since the launch of the Dao Food Incubator in 2020, Dao Food International has invested in two cell-cultured meat companies and continues to support outstanding projects and expand its investment portfolio to facilitate the development of this emerging industry.
Cultured Decadence, a US-China cross-border venture among the 2nd Dao Foods Cohort, specializes in cell-cultured lobster meat. Upside Foods, the FDA's pre-marketing consultation subject, acquired Cultured Decadence in January 2022.
NewDay Farm, formed by the regenerative medicine team of Dr. DAI Jianwu, is one of Dao Foods' 3rd Cohort companies. Long-term success in cultivated meat in China will require deep relationships and execution experience within policy, scientific, and industry development arenas. Dr. Dai has forged solid connections on the industry and policy side in China, as evidenced by his various scientific leadership positions in an official or semi-official capacity, including Secretary General of the Chinese Stem Cell Society and Director of the Chinese Society of Biomaterials. For now, NewDay Farm continues to do R&D in stealth mode using existing resources and will time their next raise based on the emerging policy developments surrounding cultivated meat in China. The team is currently developing and iterating the cell-cultured pork prototype product. The team expects to bring breakthrough products to the market as soon as possible and are well positioned to work with domestic regulatory agencies to promote establishing a safety system for cell-cultured meat jointly.
As an impact investor dedicated to China's alternative proteins sector, Dao Foods hopes to see the development of China's new protein sector as fast as possible to fulfill the environmental and climate impact goals behind what we do. For cell-cultured meat, the ideal scenario that we hope for is the timely leveraging and streamlining of China's existing legal and regulatory paths and processes via various government bodies. Meanwhile, we are also keenly aware of the nuances and challenges of developing and scaling up what we do in this sector in a China context. In our view, given the infancy of this sector in China, capital efficiency matters more than the quantity of capital, and patient capital is undoubtedly in more need than opportunistic hot money.
Regarding food in China, Dao Foods firmly believes that irrespective of government policy and action, consumers finally dictate, and the product is the king, which explains why we focus on identifying and nurturing entrepreneurs for this sector. Hence our theory of change: Support entrepreneurs --> Make Good Products --> Create Consumer Demand --> Achieve Policy Support --> Attract More Entrepreneurs Who Launch More Products, --> Reach the Desired Impact Goal of Protein Diversification.
In the end, we all get good food and a better world. We wish everyone a happy and prosperous Year of the Rabbit in 2023!
细胞培养肉商业化的法律规范与监管：外国经验及对我国启示。Regulating the commercialization of cell-cultured meat: practices in selected jurisdictions and their implications for China. by LI Yujuan, FU Xiongfei and DU Li.
FDA Completes First Pre-Market Consultation for Human Food Made Using Animal Cell Culture Technology. by FDA. https://www.fda.gov/food/cfsan-constituent-updates/fda-completes-first-pre-market-consultation-human-food-made-using-animal-cell-culture-technology
活动回顾｜“FDA深度解读：细胞培养肉在美国首次获批的监管审批路径”研讨会顺利召开。by 永续中心AGF。 https://mp.weixin.qq.com/s/97Z5hhx2BcYK54tPg5Pgfg
活动实录｜永续带你了解细胞培养肉上市前有哪些步骤？ by 永续中心AGF。https://mp.weixin.qq.com/s/oP18MadCLh79HcbUjDQflg
Exhibit: Current CFSA Approval Process for Novel Food Ingredients