CHINESE AUTHORITIES LAUNCH PUBLIC FOOD AND PRODUCT SAFETY

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