International Standards a Challenge for Many Chinese

UNCLAS GUANGZHOU 000837 SIPDIS SENSITIVE SIPDIS E.O. 12958: N/A TAGS: ETRD ECIN EINV PGOV CH SUBJECT: International Standards a Challenge for Many Chinese Exporters BUSINESS-SENSITIVE ¶1. (U) SUMMARY: As challenging as it may be at times for U.S. companies to get a grip on the changing scene here in South China in terms of consumer safety, it is probably a factor several times greater in terms of difficulty for Chinese companies wishing to export to the United States. They are often confused about required standards, or simply lack the technical ability to conform. END SUMMARY Chinese Companies Struggle to Understand, Meet Requirements -------------- ¶1. (U) The Guangdong WTO Affairs Consultation Service Center, an important source on standards for Chinese exporters, understands the difficulties Chinese exporters face when trying to meet overseas standards. According to Deputy Director Chen Lei, many Chinese companies realize that competition has made it necessary to adhere to international standards, but they complain about the difficulty in meeting the requirements. In response, the Service Center holds seminars and publishes journals about the most common ISO standards. Government, too, has become involved. For example, the Ministry of Commerce has published the "Technical Guide for Export Commodities," which contains information regarding standards about more than 30 types of products. Looking Toward Europe -------------- ¶2. (SBU) Chen Lei noted that China has drawn on EU and U.S. standards when creating its own, and that developing technical standards was a goal set forth in the Eleventh Five Year Plan. When asked which national standards were most used, Chen said EU standards are the most developed, and represent the future trend of international standards. ¶3. (SBU) Chen also said that the market for certification is open to foreign companies and that many, such as SGS, have been active in the market since the 1980s and 1990s. The Chinese government encourages the operation of these companies because they enable Chinese exporters to be certified and recognized internationally. Lack of Technical Ability Limits Chinese Compliance -------------- -------------- ¶4. (SBU) In addition to their inability to meet international standards, many Chinese companies have difficulty even reaching Chinese standards. Chen stated that getting Chinese companies to meet domestic and international standards is one of the government's primary goals, but that most Chinese companies lack the technical ability to do so. Profile of an International Quality Assurance Company -------------- -------------- ¶5. (SBU) In the absence of their own quality control unit, companies that export to the United States or Europe often must turn to international quality assurance firms like Specialized Technology Resources, Inc. (STR). According to Leo Hu, from STR Shenzhen's marketing department, STR provides testing and quality assurance programs, product design evaluations, product development support, manufacturing and social and environmental audits, supply chain inspections and assessments, ISO certification, and UL regulatory services. The company also offers a wide spectrum of consulting services, including risk management assessments for investors, expert witness testimony, and serving as a regulatory affairs liaison. ¶6. (SBU) For a factory audit, STR charges between USD 600 and USD 1600, depending on the scope of the audit and the desired certifications. When performing its product safety testing role, STR tests both raw materials and finished products to determine whether international standards are met, and to ensure that the goods in question are safe for use by consumers. GOLDBERG