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Cablegate: Hhs Delegation Views Aquaculture Industry in China's

VZCZCXRO4250
RR RUEHCN RUEHGH RUEHVC
DE RUEHGZ #0891/01 2200602
ZNR UUUUU ZZH
R 080602Z AUG 07
FM AMCONSUL GUANGZHOU
TO RUEHC/SECSTATE WASHDC 6355
INFO RUEHOO/CHINA POSTS COLLECTIVE
RUEAUSA/DEPT OF HHS WASHDC
RUEHRC/DEPT OF AGRICULTURE WASHINGTON DC
RUCPDOC/USDOC WASHDC
RUEATRS/DEPT OF TREASURY WASHDC
RUEAIIA/CIA WASHDC
RUEKJCS/DIA WASHDC

UNCLAS SECTION 01 OF 03 GUANGZHOU 000891

SIPDIS

SENSITIVE
SIPDIS

STATE PASS TO USTR

E.O. 12958: N/A
TAGS: ETRD EFIS TBIO PGOV CH
SUBJECT: HHS Delegation Views Aquaculture Industry in China's
Shrimp-Producing Capital

Ref A: Guangzhou 767 Ref B: Beijing 5101

1. (SBU) SUMMARY: Chinese officials emphasized to a U.S. Department
of Health and Human Services (HHS) delegation touring the
shrimp-processing industry in Zhanjiang, Guangdong province on
August 3 their hope that the visit would help to ease or remove the
current import alert on shrimp and other farm-raised seafood. Their
goal: to resume aquaculture industry exports to the U.S. as soon as
possible. The delegation had an opportunity to visit the
headquarters of the local food quality and safety inspection
department, a food quality testing laboratory, a seafood processing
plant, and a shrimp farm, where they discussed the traceability,
monitoring, testing, and overall quality control of the products.
END SUMMARY

Police Escorts and Red Carpets
------------------------------

2. (SBU) The VIP treatment provided to the delegation during its
whirlwind visit to Zhanjiang highlighted the importance placed by
the Chinese on resolving the issue of Chinese shrimp importation to
the United States. (Ref A provides some statistics different from
the ones in this cable.) Though the delegation was careful to state
that the purpose of its visit was not to inspect food-processing
facilities, but to learn first-hand about the aquaculture process in
South China, the local press nonetheless cast the visit as an
"inspection and assessment visit." Semantics aside, stories in the
Zhanjiang press were generally positive and stressed bilateral
cooperation, which reflected the overall tone desired by the Chinese
side.

3. (SBU) The HHS delegation's visit drew high-level interest at the
national, provincial, and municipal levels. In addition to a lunch
hosted by Zhanjiang's mayor and attended by the city's director
general, both Vice Mayor Mai Jiaomeng and city Vice
Secretary-general Liu Bing accompanied the traveling party

SIPDIS
throughout the day. Import and Export Food Safety Bureau Deputy
Director General Li Chunfeng, from the General Administration of
Quality Supervision, Inspection and Quarantine of the People's
Republic of China (AQSIQ), and Bureau of Fisheries Deputy Director
Guo Yunfeng represented Beijing during the visit. One of the most
active participants was Guangdong Entry-Exit Inspection and
Quarantine Bureau (Guangdong CIQ) Director General Zhong De Chang,
who spoke passionately about his bureau's role in regulating exports
from Guangdong province.

Serious Business
-----------------

4. (SBU) Zhanjiang's economic reliance on shrimp exports to the
United States is immense. The city is the biggest prawn producer in
China, and boasts an export market of USD 470 million annually -- 52
percent of which is to the United States. The U.S. Food and Drug
Administration's import alert, along with bad press from other food
safety scandals, has already had a dramatic effect on South China;
one member of the delegation reported having been told that the
ripple effect from the import alert had already affected the
livelihoods of more than one million people in Guangdong.
Regardless of the actual numbers, the Chinese side took special
pains to highlight repeatedly that they take food safety seriously,
and that inspection, certification and registration are integral
parts of the aquaculture industry here.

The Inspection, Certification, and Registration Process
---------------------------- ----------------------------

5. (SBU) Inspections by Guangdong CIQ of aquiculture companies take
several forms:

--first, there is a yearly inspection to determine if the firm meets
the requirements of CIQ certification; a producer must meet or
exceed these standards if it wishes to engage in export activities;

--second, an inspection takes place at least once each breeding
cycle, though Guangdong CIQ's Zhong noted that inspectors
practically live in the plants during breeding season;

--third, periodic, unannounced visits throughout the lifecycle and
processing ensure continued adherence to standards.

NOTE: If a species is considered "high risk," which means that it
has a higher rate of sickness, or that it requires more frequent

GUANGZHOU 00000891 002 OF 003


administration of drugs than most species, the duration between
inspections is shortened. END NOTE.

6. (SBU) The delegation visited a food testing laboratory that
provides technical support to Zhanjiang CIQ's operations and
inspections by testing for drug and chemical residue, heavy metals,
and microorganisms. The lab's 25 employees include specialists in
chemistry, food science, and marine biology, as well as two advisors
with doctoral degrees. While touring the facility, at least one
member of the HHS delegation noted that the laboratory contained
numerous expensive -- and important -- high-tech instruments for
testing samples similar to those seen in other international food
processing facilities.

7. (SBU) Zhanjiang CIQ indicated that it has strengthened its
registration program by implementing an electronic video
surveillance and accounting system, which allows real-time
monitoring of some fish farms, processing plants, and packing areas.
The accounting system tracks all export-bound products by batch and
identification numbers, and can be used to trace problems to
individual producers. According to Zhong, this electronic system is
intended to complement, not replace, the present inspection regimen,
and reaches beyond seafood products to all types of foodstuffs.

Shrimp by the Ton
------------------

8. (SBU) The Guolian Aquatic Products Company processing facility
has an area of one million square meters, of which 60,000 square
meters are workshops. The facility, which runs on two shifts, can
process 300 tons of seafood -- mostly prawns and tilapia -- each
day, and has a cold storage capacity of 10,000 tons. Its 4,600
employees include 400 "technicians" who direct the unskilled
workforce and perform administrative duties.

9. (SBU) The Guolian facility is a showcase for Zhanjiang's food
safety and quality control system. Employees working around food
products pass through an elaborate decontamination process before
beginning their shift (as did the delegation on their tour). The
processing facilities, which began service in 2000, appeared clean
and well organized. Guolian's electronic long-distance video
supervisory system allows managers at company headquarters to
monitor not only every aspect of operations at the processing plant,
but also to view activity at the company's aquaculture farm from
their desks. Plant officials also said they could provide access to
this video over the internet to customers in such locations as
Japan, for example, who wished to monitor activities in real-time.

And on His Farm He had a Shrimp . . .
-------------------------------------

10. (SBU) The Guolian Nansan Farming Base consists of 46 ponds, a
hatchery center, office buildings and dormitories -- all spanning
800 hectares on sandy Nansan Island. The facility, which breeds
over 20 billion larva annually, serves as the source of shrimp for
Guolian's processing plant. The farm only uses feed from
CIQ-registered sources, and employs a system to monitor and maintain
water cleanliness, salination, and temperature. Employees coming
into contact with breed-stock and the like are required to don
protective clothes, gloves, hats, and masks, and must rinse their
boots in antiseptic before entering the 7,000 square meter hatchery
center.

11. (SBU) The Farming Base performs nearly all stages of prawn
life-cycle management. According to Guolian's president, Li Zhong,
the company lacks the technology to cultivate the shrimp eggs
required for each breeding cycle, and must still purchase this
expensive "raw material" from vendors in the United States. Li
noted that Guolian is currently developing this technology for its
own use.

Not-so-quiet Desperation
------------------------

12. (SBU) The final meeting of the day -- held immediately before
the delegation left for the airport -- consisted of the Chinese side
essentially begging for the delegation's help in resolving the
shrimp-trade issue. The delegation reiterated that the previous
days' talks in Beijing (Ref B) had set a framework for signing a
Memorandum of Agreement on the food and feed safety issue, but that
much work was still to be done before the December deadline. As a
parting statement, Li Chun Feng noted that, after seeing the effort

GUANGZHOU 00000891 003 OF 003


by the Zhanjiang government to make the visit a success, and
considering the support from the central government in Beijing, he
had no doubt that China was willing to do whatever was necessary to
resume seafood exports to the United States. (COMMENT: Judging by
the awkward timing and forceful presentation of his brief remarks,
Li was almost certainly working from Beijing-approved talking points
when he made this final statement. END COMMENT.)

13. The Delegation did not have an opportunity to review this cable
before transmission.


GOLDBERG

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