AQSIQ INVESTIGATING SOURCE OF LEAD PAINT IN GUANGDONG "LEE

UNCLAS SECTION 01 OF 02 BEIJING 005502

SIPDIS

STATE PASS CONSUMER PRODUCTS SAFETY COMMISSION LAURIE HOPKINS/INTL
PROGRAMS
HHS FOR OGHA/STEIGER AND PASS TO FDA/LUMPKIN
STATE PASS USTR CHINA OFFICE/TIM WINELAND
STATE PASS OMB/INT'L AFFAIRS
STATE PASS HOMELAND SECURITY COUNCIL
STATE PASS FOOD SAFETY WORKING GROUP
EAP/PD FOR LLOYD NEIGHBORS
USDA FOR FSIS/RAYMOND
USDA FOR FAS OA/YOST, OCRA/ALEXANDER, OSTA/BRANDT
COMMERCE FOR ITA/HIJIKATA
STATE PASS TRANSPORTATION FOR ABRAHAM/KRATZKE

SENSITIVE
SIPDIS

E.O. 12958: N/A
TAGS: ECON ETRD PREL CH
SUBJECT: AQSIQ INVESTIGATING SOURCE OF LEAD PAINT IN GUANGDONG "LEE
DER" TOY CASE

REF: A. Guangzhou 887


B. Guangzhou 911


1. (SBU) SUMMARY: General Administration of Quality Supervision,
Inspection, and Quarantine (AQSIQ) General Director Wang Xin told
econoffs August 14 that AQSIQ was investigating the paint pigment
that Foshan Lee Der Company (Li Da) acquired from a supplier for the
manufacturing of Mattel Fisher Price toys, which were recalled in
the United States on August 2. The pigment appeared to have been
certified by the Swiss verification firm SGS as lead-free, but,
according to AQSIQ, the certificate was either fraudulent or issued
in error. (In other reporting (Ref. A),Mattel officials indicated
that they believed the certificate was fake.) Wang said that AQSIQ
has issued internal guidance to local authorities to tighten
inspection procedures, in particular by increasing the sample size
in random checks, in order to help ensure that all products exported
are safe. In these particular cases, he said, it was the raw
materials that caused problems, not the manufacturer's lack of
awareness of the greater importance of product safety. Wang assured
Econ Mincouns that AQSIQ personnel were working hard to ensure the
safety of China's exports, and expressed frustration about the
continued negative portrayals of Chinese exports in foreign press.
Regarding the September U.S.-Sino Consumer Product Safety Summit,
Wang said that the Chinese delegation would include 15 government
officials from AQSIQ and municipal inspection teams, as well as 22
company representatives. Mincouns expressed the United States'
strong support for continued close cooperation between AQSIQ and the
U.S. Consumer Products Safety Commission (CPSC) and for a
successful, results-oriented Product Safety Summit. (Note: This
meeting took place 12 hours before the August 14 CPSC press
conference announcing a second Mattel recall, which had not yet been
disclosed to AQSIQ.) END SUMMARY.

AQSIQ INVESTIGATES LEAD PAINT
USED BY FOSHAN LEE DER COMPANY
--------------


2. (SBU) General Administration of Quality Supervision, Inspection,
and Quarantine (AQSIQ) General Director Wang Xin told econoffs
August 14 that AQSIQ was investigating the paint pigment that Foshan
Lee Der Company (Li Da) acquired from a supplier for the
manufacturing of Mattel Fisher Price toys, which were recalled in
the United States on August 2. The pigment appeared to have been
certified by the Swiss verification firm SGS as lead-free, but,
according to AQSIQ, the certificate was either fraudulent or issued
in error. The investigation is still ongoing. Wang expressed
concern that "even counterfeiters know they need a fake
certificate," referring to the challenges that inspectors now face
in tracking violations.


3. (SBU) Wang insisted that "all companies" exporting products to
the United States are checked to ensure they meet U.S. safety
requirements, and random sampling helps ensure that. In these
particular cases, he said, it was the raw materials that caused
problems, not the manufacturer's lack of awareness of the greater
importance of product safety. He assured econoffs that both the lead
paint and the molds used to manufacture the toys at Lee Der have
been removed from the factory premises. Wang added that, to deal
with this problem, AQSIQ was developing an internal document,
"Notification on Increasing Testing of Lead Content in Toy Products
for Export to the United States." Although he had a copy of the
document in front of him during the meeting, he declined to share it
with econoffs. He characterized it as internal guidance to local
authorities to tighten inspection procedures, in particular by
increasing the sample size in random checks, in order to help ensure
that all products exported are safe.


BEIJING 00005502 002 OF 002



4. (SBU) Asked by Mincouns if China would expand its recall system
to include items beyond food and automobiles, Wang Xin said that his
own view was that China would "eventually" head in that direction,
"but not yet." He did not indicate into which areas the recall
system might expand.

WANG REGRETS BAD PRESS
ABOUT CHINESE EXPORTS
--------------


5. (SBU) Wang insisted that China places great importance on the
safety of both domestic products and exports, but noted that no
country mandates inspections for every single exported item. China
could not possibly inspect all its outbound goods. Furthermore, Wang
said he understood "clearly" the U.S. Consumer Product Safety
Commission (CPSC) recall process and that recalls are commonplace.
Still, he regretted that "Made in China" was coming to mean "recall"
through the unconstructive attention of the foreign press. China is
working hard to address the problem, he declared, and has the
regulatory systems in place to do so, a fact that should be
acknowledged. Mincouns said that he understood China was making
great efforts in this area, and that we have common interests in
ensuring a strong regulatory system in China.

AQSIQ CLOSES FACTORIES
IN SPITE OF JOB LOSSES
--------------


6. (SBU) Wang spoke at length about the extent to which AQSIQ had
gone to shut down violators, noting the significant loss of jobs
that had occurred at the Lee Der factory after the August 2 recall
and also at the RC2 factory after the June recall of Thomas the
Train toy sets. At Lee Der, which had a 10 year relationship with
Mattel, over 2,000 employees were now jobless. At RC2, 1,200
employees lost their jobs, although 500 people were still employed
in a clean-up project. Wang also questioned the scope of the RC2
recall, which covered toys manufactured over a two-year period. The
lead paint, he claimed, was only used on the production line for
five months and was only applied on the red "stop sign" piece in the
toy set, not on other pieces. But he acknowledged that there was no
way to identify which sets contained the defective pieces.

PARTICIPATION AT THE U.S.-SINO
CONSUMER PRODUCT SAFETY SUMMIT
--------------


7. (SBU) Regarding the September U.S.-Sino Consumer Product Safety
Summit in Maryland, Wang said that AQSIQ Vice Minister Wei
Chuangzhong, himself, and 13 others from the Chinese and local
governments will attend, on top of representatives from 22 companies
and industry associations. Minister Li Changjiang will not be able
to attend.

PICCUTA