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Cablegate: Chinese Inspectors Blame U.S. Media and Unlicensed

DE RUEHGZ #0911/01 2270919
R 150919Z AUG 07





E.O. 12958: N/A
SUBJECT: Chinese Inspectors Blame U.S. Media and Unlicensed
Workshops for Consumer Product Safety Problems

1. (SBU) Summary: Guangzhou Technical Supervision Bureau (TSB)
Deputy Director General Liu Shu Biao blamed an overly negative U.S.
media and unlicensed workshops for China's recent spate of
high-profile product safety recalls. Despite the defensiveness of
his remarks, he said that the central governmentQs recently
announced safety regulations for food products showed Beijing's
commitment to addressing consumer safety concerns. Details
regarding implementation of these new regulations have yet to be
determined. End Summary.

Guangzhou TSB's Role in Consumer Product Safety: A Small Sliver of
the Pie
--------------------------------------------- ---------

2. (U) The Guangzhou TSB conducts quality inspections at factories
and plants here to ensure companies comply with the mandatory
standards set by the national authorities in Beijing. They also
conduct safety inspections of certain infrastructure, such as
elevators, fire engines and gas stations. Their mandate only covers
products made for the domestic market, and they are only responsible
for goods while in production on the factory floor. Once the goods
leave the factory, another bureau -- the State Administration of
Industries and Commerce (SAIC) -- takes over quality control
monitoring. Yet another agency -- the General Administration of
Quality Supervision, Inspection, and Quarantine (AQSIQ) -- covers
all export and import products.

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3. (U) Up until 2005, the TSB operated as a separate government
bureau on both the national and local levels. In 2005, however, the
national TSB along with several other bureaus were combined to form
AQSIQ. At the local level, the TSB, SAIC and AQSIQ all continue to
operate as independent bureaus.

Eleven Agencies, Thousands of Offices and Little Coordination or
--------------------------------------------- ----

4. (SBU) The Guangzhou TSB is just one of thousands of TSBs around
the country; each level of local government has its own TSB. In a
meeting on August 10, 2007, Deputy Director General Liu explained to
Conoffs that all regulations and standards governing consumer
product safety are set in Beijing and implemented countrywide by 11
different agencies each with offices at various levels of
government. He seemed surprised when asked if any coordination
existed between the various agencies and TSBs. He replied that
although he knew some of the other leaders personally, there was no
formal coordination or cooperation.

U.S. Media Exaggerates the Consumer Safety Problem
--------------------------------------------- -----

5. (SBU) Liu blamed the U.S. media for exaggerating the scope of
the consumer safety problem in China. He argued that the quality
control of Chinese goods had been consistently good the last couple
of years. Every food and industrial product manufactured in
Guangzhou is sampled for inspection. Food products are sampled six
times a year and have approximately a 90 percent pass rate; other
industrial products are sampled once or twice a year and have about
an 80 percent pass rate. Although he did not know the precise
numbers, he said export goods had an even higher pass rate. Liu
believes Chinese products are of an even higher quality than
American products, claiming that more Chinese goods pass Japan's
strict import regulations than American goods.

Unlicensed Workshops -- The Source of the Problem
--------------------------------------------- ----

6. (SBU) On several occasions during the meeting with Conoffs, Liu
and his TSB colleagues stated their concern that small, unlicensed
workshops are not abiding by safety guidelines, and that these
outfits are tarnishing the reputation of China's exports. Liu
commented that many of these workshops were run by farmers or
business owners, who were operating on the margins and did not have
enough money to obtain the required licenses. He said many of these
small business owners were aware that their quality standards were
below those mandated nationally and therefore did not attempt to get
licenses. To address this problem, the TSB is about to launch a
campaign to close down all unlicensed shops in the city of

GUANGZHOU 00000911 002 OF 002

The July 26th Special Rules

7. (U) The TSB officials stressed Beijing's passing of new
regulations -- which they called the July 26th Special Rules -- as
proof that the central government is taking action to address
consumer product safety concerns. Liu told us that the new
regulations call for stricter controls on inputs and raw materials
used in making final food products. The TSB officials said these
regulations may later be expanded to apply to other products besides
food. They noted the new regulations carry the weight of law,
stipulate stricter enforcement of already existing laws, levy
heavier penalties for violators, and place greater responsibility on
government officials. Lastly, the regulations outline stricter
safety controls on export and import products. The Guangzhou TSB is
now in the process of deciding how to implement the new regulations.
Although the provincial Guangdong TSB held a conference on July 30
with over 3,000 government officials and food manufacturing company
leaders, no implementation guidance on new rules was set.

Guangzhou's Consumers Not Too Concerned About Consumer Product
--------------------------------------------- ---------

8. (U) Guangzhou consumers are apparently more concerned about
product safety than they have been in the past but no where near as
concerned as American consumers. TSB officials said that there were
two main reasons for the increase in concern. First, due to
improved testing technology, TSB now detects more problems than it
had before. Second, as wages increase, consumers pay greater
attention to the quality of the goods they buy.


9. (SBU) ConGen Guangzhou has a good relationship with officials at
the Guangzhou TSB. All of the four officials we met with have been
to the U.S., and one of them studied in Los Angeles for one year.
In the past, setting up meetings with them only required a direct
phone call. This time, however, the TSB officials told us they
needed prior Foreign Affairs Office approval to meet. This change
reflects the growing sensitivity of consumer product safety issues
and perhaps even the greater outreach of the FAO on all issues about
which the consulate inquires (in itself, a continuing and disturbing

10. (SBU) The TSB officials came across as somewhat defensive and
deflected blame away from sources of the problem that reflected on
China. However, because all of them had been to the United States
and were somewhat familiar with the U.S. regulatory system, they had
a basis for comparison that many other Chinese officials lack. They
repeated several times that their procedures and the challenges they
faced were "just like in the U.S." Although some of these
comparisons were inaccurate, it was clear they understood procedures
for ensuring consumer product safety. Nevertheless, they lamented
that many of those methods wouldn't work in China since local
conditions differ from conditions in the U.S.


© Scoop Media

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