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Cablegate: International Standards a Challenge for Many Chinese

VZCZCXRO1736
RR RUEHCN RUEHGH RUEHVC
DE RUEHGZ #0837 2060746
ZNR UUUUU ZZH
R 250746Z JUL 07
FM AMCONSUL GUANGZHOU
TO RUEHC/SECSTATE WASHDC 6302
INFO RUEHOO/CHINA POSTS COLLECTIVE
RUEAIIA/CIA WASHDC
RUEKJCS/DIA WASHDC

UNCLAS GUANGZHOU 000837

SIPDIS

SENSITIVE
SIPDIS

E.O. 12958: N/A
TAGS: ETRD ECIN EINV PGOV CH
SUBJECT: International Standards a Challenge for Many Chinese
Exporters


BUSINESS-SENSITIVE

1. (U) SUMMARY: As challenging as it may be at times for U.S.
companies to get a grip on the changing scene here in South China in
terms of consumer safety, it is probably a factor several times
greater in terms of difficulty for Chinese companies wishing to
export to the United States. They are often confused about required
standards, or simply lack the technical ability to conform. END
SUMMARY

Chinese Companies Struggle to Understand,
Meet Requirements
-------------------------------------------

1. (U) The Guangdong WTO Affairs Consultation Service Center, an
important source on standards for Chinese exporters, understands the
difficulties Chinese exporters face when trying to meet overseas
standards. According to Deputy Director Chen Lei, many Chinese
companies realize that competition has made it necessary to adhere
to international standards, but they complain about the difficulty
in meeting the requirements. In response, the Service Center holds
seminars and publishes journals about the most common ISO standards.
Government, too, has become involved. For example, the Ministry of
Commerce has published the "Technical Guide for Export Commodities,"
which contains information regarding standards about more than 30
types of products.

Looking Toward Europe
---------------------

2. (SBU) Chen Lei noted that China has drawn on EU and U.S.
standards when creating its own, and that developing technical
standards was a goal set forth in the Eleventh Five Year Plan. When
asked which national standards were most used, Chen said EU
standards are the most developed, and represent the future trend of
international standards.

3. (SBU) Chen also said that the market for certification is open to
foreign companies and that many, such as SGS, have been active in
the market since the 1980s and 1990s. The Chinese government
encourages the operation of these companies because they enable
Chinese exporters to be certified and recognized internationally.

Lack of Technical Ability Limits Chinese Compliance
--------------------------------------------- ------

4. (SBU) In addition to their inability to meet international
standards, many Chinese companies have difficulty even reaching
Chinese standards. Chen stated that getting Chinese companies to
meet domestic and international standards is one of the government's
primary goals, but that most Chinese companies lack the technical
ability to do so.

Profile of an International Quality Assurance Company
--------------------------------------------- --------

5. (SBU) In the absence of their own quality control unit, companies
that export to the United States or Europe often must turn to
international quality assurance firms like Specialized Technology
Resources, Inc. (STR). According to Leo Hu, from STR Shenzhen's
marketing department, STR provides testing and quality assurance
programs, product design evaluations, product development support,
manufacturing and social and environmental audits, supply chain
inspections and assessments, ISO certification, and UL regulatory
services. The company also offers a wide spectrum of consulting
services, including risk management assessments for investors,
expert witness testimony, and serving as a regulatory affairs
liaison.

6. (SBU) For a factory audit, STR charges between USD 600 and USD
1600, depending on the scope of the audit and the desired
certifications. When performing its product safety testing role,
STR tests both raw materials and finished products to determine
whether international standards are met, and to ensure that the
goods in question are safe for use by consumers.


GOLDBERG

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