VICE PREMIER WU YI TO VISIT MATTEL FACTORIES

UNCLAS GUANGZHOU 001230

SIPDIS

SENSITIVE
SIPDIS

STATE PASS CONSUMER PRODUCTS SAFETY COMMISSION RICH O'BRIEN/INTL
PROGRAMS
STATE PASS USTR CHINA OFFICE
STATE PASS HOMELAND SECURITY COUNCIL
STATE PASS IMPORT SAFETY WORKING GROUP


E.O. 12958: N/A
TAGS: ETRD EIND TBIO ECON PGOV CH
SUBJECT: VICE PREMIER WU YI TO VISIT MATTEL FACTORIES

REF: GUANGZHOU 1213

(U) This document is sensitive but unclassified. Please protect
accordingly. Not for release outside U.S. government channels. Not
for internet publication.


1. (SBU) Summary: In another sign that Mattel and Beijing are
working together to fix their mutual product safety image problem,
Vice Premier Wu Yi, who will be in Guangdong to participate in a
major product safety conference, will visit three Mattel factories
next week, according to Mattel executives. In the run-up to the
conference, Guangdong inspection agencies announced that they have
shuttered nearly half of toy exporters in the province. End
summary.


2. (SBU) Vice Premier Wu Yi will visit three Mattel factories and
two of its vendors' factories during a trip to Guangdong next week,
according to Theodore Pang, Mattel's Asia Pacific Legal Affairs
Director. Pang noted these five would be the only toy factories on
the schedule for Madame Wu's Guangdong visit. He said that she
would go to Mattel's die cast factory in Foshan (reftel),a factory
in Dongguan that made some dolls involved in the recent
magnet-related recall, and a factory acquired with Mattel's purchase
of Radica last year. In addition, Madame Wu will visit Wynnewood
Corporation and Jetta Company, two vendors that supply Mattel. Pang
told us that Madame Wu would also visit personal care product and
food companies. Among those may be Procter and Gamble, though the P
& G reps attending an IPR seminar at the consulate on November 20
did not venture any information regarding the potential visit.


3. (U) Madame Wu will be in Guangdong to participate in the third
conference hosted by the State Council's taskforce on product
quality and food safety. She heads the task force, which was
founded in August and includes senior officials from the Ministries
of Health and Commerce, the Public Security Bureau, the
Administration for Industry and Commerce, and the State
Administration of Taxation. The conference will take place the last
week in November, but exact dates have not yet been publicly
released. Pharmaceutical products will be the focus of the meeting.
The first conference, held in Hangzhou, Zhejiang Province,
September 26-27, centered on processed food products and
restaurants. The second conference, which took place October 26-27
in Weifang, Shandong Province, focused on agricultural goods.


4. (U) In the lead up to the conference, Guangdong's China
Inspection and Quarantine office (CIQ) announced yesterday that 46
percent of toy exporters in Guangdong had been closed. Out of 1,323
toy export manufacturers, 366 companies have lost their export
permits, and another 242 have been suspended from operation entirely
over the last five months. CIQ also announced that among
Guangdong's 1,139 food processing companies, 122 had lost their
sanitary permits and 62 had operations suspended.


5. (SBU) Comment: Wu's visit, the conference and announcement of
factory closures all underscore China's determination to fix its
product safety problem. After months of accusations and strained
relations, Wu's visit to Mattel is also a clear indication that
Beijing and Mattel are now working together to restore the
reputations of the "made in China" and Mattel brands. They clearly
recognize how closely linked those brands are in the eyes of
consumers.

GOLDBERG