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Cablegate: Chinese Authorities Launch Public Food and Product Safety

VZCZCXRO1370
PP RUEHCN RUEHGH RUEHVC
DE RUEHBJ #5899/01 2522233
ZNR UUUUU ZZH
P 092233Z SEP 07 ZDK
FM AMEMBASSY BEIJING
TO RUEHC/SECSTATE WASHDC PRIORITY 1641
INFO RUCPDOC/USDOC WASHDC
RUEAUSA/DEPT OF HHS WASHINGTON DC
RUEATRS/DEPT OF TREASURY WASHINGTON DC
RHMFIUU/DEPT OF HOMELAND SECURITY WASHINGTON DC
RUCPDOC/DEPT OF COMMERCE WASHDC
RULSDMK/DEPT OF TRANSPORTATION WASHDC
RUEAWJA/DEPT OF JUSTICE WASHINGTON DC
RUEHRC/DEPT OF AGRICULTURE WASHDC
RHEHNSC/NSC WASHDC
RUEAEPA/HQ EPA WASHDC
RUEHOO/CHINA POSTS COLLECTIVE

UNCLAS SECTION 01 OF 04 BEIJING 005899

SIPDIS

EAP/PD FOR NIDA EMMONS
HHS FOR OGHA/STEIGER AND PASS TO FDA/LUMPKIN
USDA FOR FSIS/RAYMOND
USDA FOR FAS OA/YOST, OCRA/ALEXANDER, OSTA/BRANT AND SHNITZLER
USDOC FOR 4420 MAC/OCEA/ACINO
USDOC FOR 6300 MAS/HIJIKATA
STATE PASS TRANSPORTATION FOR NHTSA ABRAHAM/KRATZKE
STATE PASS CONSUMER PRODUCTS SAFETY COMMISSION RICH O'BRIEN/INTL
PROGRAMS
STATE PASS USTR CHINA OFFICE/TIM WINELAND
STATE PASS OMB/INT'L AFFAIRS
STATE PASS HOMELAND SECURITY COUNCIL
STATE PASS IMPORT SAFETY WORKING GROUP

SENSITIVE
SIPDIS

E.O. 12958: N/A
TAGS: ECON ETRD TBIO PREL CH
SUBJECT: CHINESE AUTHORITIES LAUNCH PUBLIC FOOD AND PRODUCT SAFETY
CAMPAIGN

REF: A. Beijing 5273
B. Shanghai 302
C. Guangzhou 911

BEIJING 00005899 001.2 OF 004


1. (SBU) SUMMARY: Chinese authorities launched a massive campaign in
late August to publicize their improvements to China's food safety
and product
quality systems. The TV, print, and internet coverage coincided
with the release of the August 20 "White Paper on the Food Safety
and Quality
Situation," the first two meetings of the State Council Leading
Group on Food and Product Safety on August 23 and 27, and the August
31 announcement of a
revamped domestic food and product recall system. Media coverage
gave Chinese regulatory leaders the opportunity to defend publicly
the quality of Chinese
goods, deflect claims about China's culpability for the spate of
quality problems, and suggest that industry and importers share some
of the blame for quality shortcomings. It has also given authorities
some political cover for October's 17th Party Congress to show that
they are proactive, support Chinese manufacturing and brands, and
oppose "protectionist" policies of importing
countries. Chinese officials have reacted aggressively to foreign
media coverage and official U.S. food import alerts and product
recalls, repeatedly and publicly citing quality problems among
several U.S. manufacturers (Ref. A) and recent U.S. agricultural
exports. END SUMMARY.

STATE MEDIA APPARATUS HARD AT WORK
----------------------------------

2. (SBU) Beginning August 17 for two weeks, Chinese media reported
heavily on food and product safety issues as part of a massive
campaign to support a
series of official announcements about government steps to shore up
quality systems. The media coverage coincided with the release of
the August 20 "White
Paper on the Food Safety and Quality Situation," the first two
meetings of the State Council Leading Group on Food and Product
Safety on August 23 and 27,
and the August 31 announcement of a revamped domestic food and
product recall system. The three primary sources for high-level
statements on the issue are
State Council Vice Premier and State Council Leading Group on Food
Safety and Product Quality Chair Madame Wu Yi, General
Administration for Quality
Supervision, Inspection, and Quarantine (AQSIQ) Minister Li
Changjiang, and Ministry of Commerce (MOFCOM) Vice Minister Gao
Hucheng. Other senior
officials, including Agricultural Minister Sun Zhengcai, have also
appeared in interviews.

3. (SBU) Statements from these officials indicate that the
government sees the issue as an overall national economic priority
(thus the creation of the
Leading Group), as a regulatory issue (thus the involvement of
AQSIQ), and even as a trade issue (thus statements by Gao Hucheng
and even MOFCOM Minister Bo Xilai). Nationally broadcast television
programs on August 17, 19 and 20, two of which featured AQSIQ
Minister Li, as well as the State Council Leading Group
teleconference on August 23 featuring Wu Yi, and a MOFCOM press
conference on August 23 have given officials platforms to push their
unchallenged points in a controlled environment. While State Council
pronouncements are focused on the details and principles of
regulatory improvements, AQSIQ and MOFCOM officials have taken a
more aggressive tone both in public and also in private meetings

BEIJING 00005899 002.2 OF 004


with U.S. officials, pointing to
shortcomings in U.S. product quality and blaming foreign media for
misreporting facts.

4. (SBU) Post has noted that the Chinese side's talking points on
food and product safety issues have been standardized across Chinese
government
agencies, as follows:

-- Chinese manufacturing and food products are good quality. The
world should not use a few examples to characterize all of China's
manufacturing and food
production industries. The world benefits from Chinese
manufacturing.
-- Poor quality is a global problem, not a Chinese problem. No
country can have a perfect record on food or product safety.
-- Media are misreporting the facts and exaggerating the scope of
problems with Chinese goods.
-- There are product problems, standards problems, and problems with
factual reporting. These are not all China's fault.
-- The quality of Chinese food exports to other countries exceeds
the quality of U.S. and other countries' food exports to China.
-- U.S. food and industrial product shipments to China have
experienced their own quality problems, and China expects the United
States to take corrective measures to prevent a recurrence of these
problems.

5. (SBU) In addition to the national campaign, local officials have
launched their own public relations initiatives. In Shanghai, which
is considered to
have a strong and independent-minded local inspection system, Dputy
Mayor Zhou Taitong announced that a special food and product safety
working group
would be created (Ref. B). The Guangzhou Vice Mayor spoke at a
city-government organized product safety conference August 20, where
he emphasized to 3,000
attendees the key role of local officials in enforcing food and
product safety rules and proposed severe sanctions on violators of
food safety regulations (Ref. C). Guangzhou officials have announced
their own efforts to revamp their
food safety monitoring system by the end of 2008.

AQSIQ PUBLICLY CRITICAL OF U.S.
CAUTION, BUT MAKES CHANGES ANYWAY
---------------------------------

6. (SBU) An August 19 program "Dialogue: Trusting Made in China"
(xiangxin zhongguo zhizao) with AQSIQ Minister Li used video clips
of spotless factories
and emotional background music to polish the "made in China" image.
Foreign and Chinese executives from firms such as Motorola and Otis
Elevator affirmed
to Minister Li their confidence in the quality of Chinese
manufacturing. The program's host addressed the June 13 Thomas the
Train toy recall by pointing
to a sample toy set and noting that the lead paint was found only in
the small red stop sign. (Note: U.S. Consumer Product Safety
Commission confirmed to
econoff that lead paint existed in other toy set pieces as well. End
Note.) The show's host held up another plastic toy figurine and
Minister Li noted
that the lead paint was only contained in the figure's eyelashes,
and was a very small amount. The Minister conceded that the U.S.
lead standard was
different than the Chinese standard. Still, he said, to "demonize"
all of China manufacturing because of these few examples was unfair

BEIJING 00005899 003.2 OF 004


and was a form of
protectionism. "Products with defects should be recalled," he said,
"but these examples should not be used as excuses to say that all
Chinese products
are bad."

7. (SBU) When an audience member asked how China was going to
address the one-percent of substandard goods in China (a figure
cited by Minister Li himself),
Minister Li said that products from U.S. firms G.E., Bucyrus, John
Deere, and St. Jude Medical had experienced quality problems in
China. The Minister also said 200 Hummer vehicles imported into
China did not meet Chinese standards, and short-circuit in a piece
of Bucyrus mining equipment caused an explosion
that threatened lives. Poor product quality is a global phenomenon,
he said, and even the United States has experienced problems.

8. (SBU) Minister Li said that China took U.S. concerns seriously,
and so China revoked the manufacturing and export permits for two
plants involved in the pet food investigation. (Note: Chinese
investigations into the incident
are still continuing. AQSIQ and local CIQ offices are now inspecting
and testing all plant protein exports for possible melamine
contamination prior to
shipment. End Note.) He also said China would cease the use of the
chemical DEG in toothpaste, even though Chinese standards permit its
use. (Note: The
Minister did not indicate if he was referring to cessation of use of
DEG for toothpaste for domestic consumption or for export, and did
not refer
specifically to any new regulations on China's DEG standard. DEG is
not allowed in any toothpaste marketed in the United States. End
Note.) In an
August 28 meeting, AQSIQ Vice Minister Wei Chuanzhong told
Representatives Rick Larsen (D-WA) and Mark Kirk (R-IL) that there
is still no conclusive evidence that melamine contamination was
responsible for the death of U.S. pets. (Note: FDA has not
identified melamine as the cause of death either. The
combination of suspect protein compounds and analogues present in
the melamine purification process is to blame. End Note.)

9. (SBU) Chinese official statements emphasize that the government's
response to recent U.S. complaints on melamine-contaminated plant
protein and DEG-
contaminated toothpaste go beyond what is required of them under
Chinese law, and yet they still acknowledge AQSIQ's responsibility
to ensure Chinese
exports meet the standards of the importing country. China has
voluntarily adjusted its rules to meet U.S. standards and alleviate
U.S. concerns, even
though from the Chinese perspective there is no scientific basis for
such differences in the standards. While China is taking action to
respond to its own quality problems, the United States, in turn,
appears within the lens of Chinese media to be passive toward to its
own alleged substandard exports.
(Note: U.S. firms and USG agencies are investigating Chinese claims
of substandard products. Some investigations have revealed that
Chinese claims
about quality problems are not always corroborated by U.S.
suppliers. The Chinese claim in one case about the cause of turbine
malfunction has been in
dispute by the U.S. supplier for over one year. Another claim about
defective pacemakers was actually the result of a product labeling
error and a
misunderstanding by Chinese port inspectors about variable power
levels in the product. Other investigations are still ongoing.)

BEIJING 00005899 004.2 OF 004

CHINA ASKS: WHO IS TO BLAME?
-----------------------------

10. (SBU) Chinese officials frequently address the issue of who
should be blamed for China's food and product safety problems. From
their perspective,
there are several culprits:

-- A small number of small-scale enterprises in China operating
outside regulatory channels and which are breaking the law.
-- The media, which exaggerate coverage and overlook the role of
design flaws and standards in consumer product recalls.
-- Manufacturers, who have allowed design flaws to get into the
system.
-- Suppliers, who are cutting corners to keep costs down, under
pressure from their customers.
-- Protectionists, who are taking advantage of the situation to
promote their own (trade) agendas.

While Chinese authorities do not claim to be blameless, they are
eager to note that others must take some responsibility for problems
they helped create. Minister Li in an August 27 press conference
questioned what level of responsibility the manufacturers in China
(including multinational operations, like Mattel), U.S. importers,
and other parties should all bear when products do not conform to
standards and lead to recalls. He pointed to the need for several
parties to share the financial costs of these mistakes.

COMMENT
-------

11. (SBU) Convinced that some of the accusations against Chinese
products stem from protectionist rather than scientific concerns,
AQSIQ is lashing out with countercharges in an attempt to deter what
it considers baseless charges. For the last three months, AQSIQ has
singled out "quality deficiencies" in U.S.
goods and companies in front of government media outlets. These
actions have significantly increased the risk of U.S. firms in
exporting some products,
especially food products, and have had direct financial impact on
many U.S. companies.

12. (SBU) Public attention on food and product safety will most
likely intensify over the coming weeks as the government implements
a month-long campaign of food and product safety awareness in late
August and September even as it continues to roll-out the four-month
campaign to strengthen the entire national food and product safety
regulatory system. How China intends to ensure local enforcement of
new directives, whether it has the resources to carry out this
enforcement, and whether that enforcement will be consistent
following the initial four-month campaign remains to be seen. Post
will continue to report on these and other developments.

RANDT

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