AQSIQ STILL LACKING IN INFANT FORMULA RESPONSE

UNCLAS SECTION 01 OF 02 BEIJING 003705

HHS FOR OGHA/STEIGER AND PASS TO FDA/LUMPKIN
STATE PASS TO USTR
STATE PASS TO HOMELAND SECURITY COUNCIL

SENSITIVE
SIPDIS

E.O. 12958: N/A
TAGS: TBIO EAGR PREL HHS CH
SUBJECT: AQSIQ STILL LACKING IN INFANT FORMULA RESPONSE

Ref: A) 3635

1) (SBU) SUMMARY: On September 22, the informal Beijing Agricultural
Attach Group (BAAG) met to discuss developments, impacts and
possible outcomes of the scandal involving melamine in Chinese dairy
products. While China's response to this case of contamination is
better at the central level than past incidents, there are still
significant gaps in information provided to consumers, trading
partners, and in local authorities' ability to enforce basic food
safety regulations.

EC ENGAGES AQSIQ
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2) (SBU) On September 22, 2008 AgAtt met with the Beijing
Agricultural Attach Group (BAAG) to discuss developments, impacts
and possible outcomes surrounding the scandal involving melamine in
China's domestic dairy products. The meeting was hosted by the
European Union Commission (EC) Beijing office. The EC reported that
last week an EC Director General visiting Beijing met with AQSIQ
Vice-Minister Wei Chuangzhong to discuss food safety concerns.
During the meeting, the EC official requested China implement a
voluntary ban on all dairy products destined for the European Union
(EU) market. China did not respond to that request and has taken no
action to ban dairy product exports to the EU. Although the EU does
not import fresh dairy products for consumption, EC officials
estimate that roughly 8,000 tons of pastry and 9,000 tons of
chocolate, which contain processed dairy products, are imported from
China on a yearly basis. However, neither the EC nor the EU member
states have taken action to ban or restrict Chinese exports.

3) (SBU) The EC requested AQSIQ resolve this issue transparently and
present official findings, testing methodologies, and results in an
open and timely fashion. Another issue the EC pointed out was the
lack of scientific knowledge about the impacts of melamine and the
need to cooperate with AQSIQ on appropriate testing methodologies.


4) (SBU) Most experts believe melamine is frequently added by
farmers at the regional collection centers in order to raise milk
products' protein content (Ref. A),but there has been little study
of direct consumption of melamine. Other experts believe the
melamine is added in the final stage of the supply chain, milk
distribution centers, before dairy products are sourced to the major
retail or wholesale outlets. According to a BAAG veterinarian,
melamine is non water soluble and it requires emulsifying agents,
such as cynauric acid, in order to dissolve. When combined with
melamine, the consumption of these compounds can lead to the
development of kidney calculus (stones) that can lead to further
health complications. Thus, such compounds or other by-products of
adulterating milk products with melamine might have other,
unexpected health impacts.

5) (SBU) BAAG representatives had different reactions to the
scandal. The group discussed country responses to the food safety
scandal and discovered every country had a different reaction and
justification. The largest melamine producing enterprise in China
is a Sino-Dutch joint venture. Given the large foreign investment
and ongoing joint venture, the representative of the Netherlands was
concerned about openly admonishing the Government of China or AQSIQ.
The Australian and New Zealand representatives believed that
issuing a broad travel advisory notification warning to expatriates
and tourists about China's domestically produced dairy products
represents a de facto statement that all products are tainted with
melamine and could be interpreted by the Chinese authorities as an
excessive and unwarranted response.

6) (SBU) Denmark decided to publicly issue a travel notification on
the Embassy and Foreign Ministry web site advising its citizens to
"avoid consuming dairy products when visiting China until further
notice." According to the representative from Denmark, dairy is a
staple food and Danes consume a much higher volume of dairy products
and hence are more susceptible to contamination. Canada also
implemented a travel notification warning against dairy consumption
that referenced a history of food safety scandals involving ethnic
food imports and Canada's large community of overseas Chinese that
frequently travel between the two countries.

LACK OF SOLID INFORMATION REMAINS
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7) (SBU) None of the BAAG members felt that they were receiving
sufficient information about the extent of the contamination or

BEIJING 00003705 002 OF 002


possible export-related contamination. According to various BAAG
representatives, when pressed about revealing more detailed
information regarding findings, AQSIQ redirects these inquiries to
provincial governments. These provincial officials have not been
forthcoming in the sharing of any information or updates with any
outside parties.

BLAME GAME BEGINS?
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8) (SBU) The group agreed that AQSIQ is not providing science-based
answers in response to this crisis. AQSIQ has not revealed testing
methodologies and other technical information and have already
mounted an offensive campaign in order to deflect criticism by the
international media. On September 11 and 12, Shenzhen Quarantine
and Inspection (CIQ) port officials reportedly detected melamine in
New Zealand and Dutch fresh dairy imports. After the press reported
these detections as official, retesting results later revealed that
CIQ officials had erred in their evaluation. Corrections were
published but the impression that this is a problem outside China
was created. Other news articles and editorials have expanded on
how foreign enterprises will greatly benefit from this national food
safety scandal.

9) (SBU) During previous food safety scandals, China's officials
were quick to point out that companies that had joint ventures with
foreign enterprises should shoulder equal responsibility and
accountability. Although government officials took some of the
responsibility for past contaminations, AQSIQ has repeatedly tried
to blame other countries in order to make a case that similar food
safety irregularities are common worldwide, especially in developed
countries. This week, FAS Beijing received two separate
notifications of irregularities with U.S. seafood imports and one
delisting of a poultry plant. Both of these notifications came
immediately following an agreement on meat safety at the JCCT.

RANDT