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Cablegate: Jiangsu and Ningbo Ciqs Urge Greater Cooperation On Food And

VZCZCXRO8482
RR RUEHCN RUEHVC
DE RUEHGH #0318/01 2251015
ZNR UUUUU ZZH
R 121015Z AUG 08
FM AMCONSUL SHANGHAI
TO RUEHC/SECSTATE WASHDC 7048
INFO RUEHOO/CHINA POSTS COLLECTIVE
RUEHKO/AMEMBASSY TOKYO 0348
RUEHGV/USMISSION GENEVA 0034
RUCPDOC/DEPT OF COMMERCE WASHINGTON DC
RUEHRC/DEPT OF AGRICULTURE WASHINGTON DC
RUEATRS/DEPT OF TREASURY WASHINGTON DC
RHEHAAA/NSC WASHINGTON DC
RUEHGH/AMCONSUL SHANGHAI 7621

UNCLAS SECTION 01 OF 03 SHANGHAI 000318

SENSITIVE
SIPDIS

STATE FOR EAP/CM AND EB
STATE PASS USTR FOR STRATFORD/WINTER/KATZ
DOC FOR ITA - DAS KASOFF, CMCQUEEN, ESZYMANSKI
TREASURY FOR OASIA - DOHNER/HAARSAGER/CUSHMAN
NSC FOR LOI, SHRIER
USDA FAS FOR ITP/SHEIKH
STATE PASS FOOD AND DRUG ADMINISTRATION FOR HICKEY

E.O. 12958: N/A
TAGS: ETRD TBIO PGOV ECON BEXP EAGR CH
SUBJECT: JIANGSU AND NINGBO CIQS URGE GREATER COOPERATION ON FOOD AND
PRODUCT SAFETY

SHANGHAI 00000318 001.2 OF 003


(U) This cable is sensitive but unclassified and for official
use only. Not for distribution outside of USG channels.

1. (SBU) Summary: The Consul General (CG) met with the Jiangsu
Provincial Entry-Exit Quality Inspection and Quarantine (CIQ)
Office in Nanjing on July 31 and the Ningbo City CIQ Office on
August 4 to discuss a wide range of import and export issues.
Both offices welcomed greater cooperation with the Consulate on
import and export issues. Jiangsu CIQ acknowledged the
importance of food and product safety and urged that the United
States only accept Chinese products with the official seal from
the General Administration of Quality Supervision, Inspection
and Quarantine (AQSIQ). Both CIQ offices noted that the biggest
problems with U.S. agricultural shipments into China are that
many shipments are mislabeled as a higher grade product and/or
under the declared weight. While Ningbo CIQ reported fewer
problems with food products, Jiangsu CIQ complained about the
usage of ractopamine in U.S. pork products. Both CIQ offices
complained about the different standards used in the United
States and urged that the USG try to simplify and unify
standards. Ningbo CIQ reported that China is trying to
streamline its inspection process by creating a list of items
that require special attention while allowing other items to
pass more quickly. End Summary.

2. (U) During farewell visits to Nanjing and Ningbo on July
30-31 and August 4 respectively, the CG met with the Jiangsu CIQ
and Ningbo CIQ. On July 31, Jiangsu CIQ Deputy Director General
(DDG) Lu Yonggui provided a detailed briefing on Jiangsu CIQ's
operations. Lu was joined by eight Jiangsu CIQ senior
department heads. The department heads were also well prepared
for the meeting and spoke in detail when called upon by Lu.
After the meeting, Deputy DG Lu gave a tour of Jiangsu CIQ
testing facilities. Lu said that Jiangsu CIQ tries to replicate
conditions in U.S. labs, even going so far as making sure that
the lighting is the same. A majority of the Jiangsu CIQ
equipment is from the United States or Europe. Ningbo CIQ
Director General Shan Wei and Deputy Director General (DDG) Chen
Mengyu were also very detailed in their later meeting with the
CG, which followed a similar format.

Food and Product Safety
-----------------------

3. (SBU) Jiangsu CIQ DDG Lu stressed the importance the Jiangsu
CIQ places on food safety, noting that food and product safety
also affects Chinese consumers. He noted that the U.S. FDA had
sent inspectors to Hubei and Guangdong to carry out
investigations. He is interested in knowing more about the
results of these investigations. In general, DDG Lu opined, FDA
reports on food and product safety problems tend to be too
simplistic. It would help Chinese authorities, as they carry
out their own investigations, if the U.S. FDA reports had more
details. This would also help Chinese authorities to better
understand U.S. concerns and resolve issues when they arise.
According to Lu, many of the Chinese products that were found to
be unsafe in the United States did not have the official General
Administration of Quality Supervision, Inspection and Quarantine
(AQSIQ) stamp and had not been reviewed by AQSIQ authorities.
He urged that the United States only accept products that have
been certified by AQSIQ and not allow any products into the
country without an AQSIQ stamp. He also noted that all U.S.
food products should have in place official Chinese labels
before arriving in China.

Agriculture Imports from USA Still a Challenge
------------------------------------------

4. (SBU) Both Jiangsu CIQ and Ningbo CIQ were pleased with the
general trade relationship, but each noted similar problems with
agricultural imports from the United States. Ningbo CIQ DDG
Chen Mengyu complained that some wood packing materials from the
United States did not bear the official IPPC stamp (an
international standard for wood packaging) and were not up to
standards. In 2007, of the total 8,741 shipments of wood
packaging, 492 did not bear the IPPC stamp and an additional 591
had other quality problems.

SHANGHAI 00000318 002.2 OF 003

5. (SBU) According to Jiangsu CIQ DDG Lu, 43 percent of
Jiangsu's cotton comes from the United States and the province
is the second largest importer of U.S. cotton in China. In 2007
there were a total of 67 shipments, of which 27 cases were not
up to standards. In 2008 to date, out of 32 cotton shipments, 9
were below grade. Additionally, 80 percent of all cotton
shipments in 2007 were under the declared weight. Jiangsu DDG
Lu also complained that some shipments of U.S. cotton were
mislabeled and given a higher grade. Every year Jiangsu CIQ
procures cotton samples from the United States and uses these
samples to compare to the shipments in making a determination of
the cotton's grade. In addition, some samples are taken to
another testing area to measure the fiber length and quality.
Like Ningbo CIQ, Jiangsu CIQ also complained that shipments are
sometimes underweight.

6. (SBU) Other problems included processed timber, where
quality issues have been increasing generally. In 2007, there
were 544 shipments, worth USD 9.4 million. Of this total, 31
shipments, worth USD 820,000, did not meet standards. Soybean
imports have also been problematic; many shipments contained
substantial amounts of blue and red marked beans (those used for
seed rather than human consumption). CIQ also detected 37
different kinds of harmful insects in the shipments. In 2007,
there were 18 shipments of U.S. soybeans worth USD 140 million
to Ningbo. Of these, 5 shipments did not qualify. Jiangsu CIQ
also had the same complaints about U.S. soybeans. While the
quality of U.S. soybeans is generally good, there are some
shipments that come in underweight and/or also contain bad
quality beans.

Animal Products Fare a Bit Better in Ningbo than in Jiangsu
--------------------------------------------- ---------------

7. (SBU) Chen emphasized that the majority of problems with
U.S. agriculture products involved goods of plant origin rather
than animal origin. In 2007, Ningbo received 19 shipments of
seafood, totaling over 376 tons. There were a few problems with
pathogen residues, but in general the seafood products were
within standards. Ningbo also received shipments of turkey
feathers and cow hides from the United States, which did not
pose any problems.

8. (SBU) Jiangsu CIQ DDG Lu said most of the problems in U.S.
agriculture came from food products, in particular frozen meat.
Only 88 percent of U.S. frozen meat shipments pass inspection.
The main problem is that U.S. pork producers use ractopamine in
their pork products, which is not allowed in China. Last year
15 U.S. pork shipments were found to have ractopamine traces.


Cotton: The Fiber of a Strong Relationship
------------------------------------------

9. (U) Given the volume of cotton imports, both Jiangsu and
Ningbo are interested in developing better communication with
the U.S. cotton industry. During the June 2008 visit of the
U.S. Cotton Council, Ningbo CIQ demonstrated China's cotton
testing procedures and standards so the Council would be better
able to advise U.S. producers. Ningbo DDG Chen noted one of the
most common problems with U.S. cotton is the strength of the
fibers and used some of the Cotton Council's samples to
demonstrate the problem. The U.S. Cotton Council discussed the
"Green Card Standards" used in the United States to measure
quality. Chen said China is generally not aware of these
standards and urged the Cotton Council to introduce the U.S.
Green Card Standards to AQSIQ authorities in Beijing.

Streamlining the System
-----------------------

10. (U) According to Chen, CIQ is working on methods to
streamline the import inspection process. During a meeting with
other CIQ offices in Shanghai, plans were announced to create a
list of approximately 1,900 tariff-line items required to
receive "special inspection." Items not on the list would

SHANGHAI 00000318 003.2 OF 003


receive a faster clearance. Ningbo intends to follow the new
guidance, which will increase efficiency in the clearance
process. Chen also noted that there was also discussion of
"black-listing" companies that willfully violate CIQ procedures
and rules. Some suggested that companies be given only one
chance before being blacklisted, but Chen felt companies should
be given at least three chances.

"China's Exports Improving, but U.S. Standards Confusing'
--------------------------------------------- ------------

11. (U) DG Shan emphasized that China's exports to the U.S.
were improving in quality but many Chinese exporters are baffled
by the array of U.S. quality standards, particularly among
different states. State standards sometimes exceed Federal
Government standards. He also said some standards are raised so
quickly, it is impossible for Chinese companies to keep pace.
As an example, he cited Chinese air conditioners, claiming that
currently no Chinese companies can meet the U.S. standards
because they have changed so rapidly. (Note: Haier air
conditioners are sold generally throughout the United States.
End Note.) He urged the United States to take a more measured
approach to changes in quality standards so Chinese companies
could adjust "step-by-step." Jiangsu DDG Lu also urged more
uniformity in U.S. standards. Jiangsu exports a large amount of
seafood to the United States. Seafood standards vary widely
among the different states in America and this was causing a
great deal of confusion among Jiangsu food exporters.

Cooperation From Both Sides
---------------------------

11. (U) Ningbo DG Shan welcomed closer cooperation with the
U.S. Consulate and U.S. business. He referred to the 2005
Memorandum of Understanding (MOU) between AQSIQ and the Consumer
Product Safety Commission, urging the U.S. side to cooperate
more closely on providing guidance on U.S. regulatory changes
that affect exporters from China. He noted his dissatisfaction
with a recent case in which the USG complained about a Chinese
export but was unwilling to reveal the name of the Chinese
company for CIQ to follow up. The USG agency involved said it
could not release the name of the company because of privacy
issues. Shan queried under such circumstances how could CIQ be
expected to do its job. The CG emphasized that U.S. exporters
to China would also welcome additional guidance as China's
regulations governing food and product safety are amended. The
CG also noted that USFDA will soon establish an office in
Shanghai and intends to cooperate closely with CIQ. Shan
welcomed the establishment of an FDA office in Shanghai and
promised Ningbo CIQ's cooperation.

12. (U) In his meeting with Jiangsu CIQ, the CG also pushed for
greater cooperation between the Consulate and Jiangsu CIQ. He
urged that the Jiangsu CIQ inform the Consulate before it
destroys or returns U.S. shipments. He noted that the Consulate
wants to organize a training session on U.S. standards and
importation for the East China area and hopes that the Jiangsu
CIQ would participate.
JARRETT

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