One of the most notorious cases in recent years was the finding of melamine in infant formula produced by Sanlu Group, a leading diary firm in north China, in 2008. Six babies were killed and thousands fell ill.

The bill includes a specific provision on infant formula powder. Producers will now have to test every batch of their product, conduct regular internal inspections and submit reports to regulators.

National outcry surrounding this incident brought about the first Food Safety Law in 2009 but public confidence in domestic baby formula has never been fully restored.

Such is China's demand for baby formula that several countries, including Australia, New Zealand and Germany, have introduced quota on milk powder exports to China. Stricter legislation and tighter scrutiny are expected to help restore the reputation of the industry.

Diary firms are also asked to register the formula of their baby milk powder and source of ingredients to provincial regulatory agencies. They are forbidden from outsourcing production.