SENATOR NELSON RAISES CONCERNS OVER CONTAMINATED DRYWALL

UNCLAS SECTION 01 OF 02 SHANGHAI 000367 CODEL SENSITIVE SIPDIS STATE FOR EAP/CM AND EEB STATE PASS CONSUMER PRODUCT SAFETY COMISSION STATE PASS USTR CHINA OFFICE E.O. 12958: N/A TAGS: ECON EIND ETRD PGOV OVIP CH SUBJECT: SENATOR NELSON RAISES CONCERNS OVER CONTAMINATED DRYWALL WITH AQSIQ SHANGHAI 00000367 001.2 OF 002 (U) This message is sensitive but unclassified and for official use only. Not for distribution outside of USG channels. -------------- Summary -------------- ¶1. (SBU) In an August 11 meeting with senior officials of China's General Administration of Quality Supervision, Inspection and Quarantine (AQSIQ),Senator Bill Nelson (D-FL) expressed concern over the devastating impact of contaminated drywall imported from China on U.S. households and indicated that President Obama might raise the issue with Chinese President Hu Jintao in November. The AQSIQ officials insisted that domestically purchased Chinese-produced drywall did not show any signs of contamination but emphasized the AQSIQ's desire for continued cooperation with the U.S. Consumer Product Safety Commission (CPSC) on this issue. End Summary. -------------- Senator Nelson Voices Concern -------------- ¶2. (SBU) During an August 11 meeting in Shanghai, Senator Nelson gave his PRC interlocutors -- AQSIQ Department of Supervision and Inspection Deputy Director General Wang Zhiyong and Shanghai Municipal China Inspection and Quarantine Bureau (CIQ) Deputy Director General Xu Chaozhe -- an impassioned description of the impact of Chinese-produced contaminated drywall that had been imported to the United States. He explained that large amounts of Chinese-made drywall had been used in Florida in 2004, after the state experienced major hurricane damage, and that as many as 100,000 homes may have been affected by problems such as strong odors, metal corrosion, and respiratory issues linked to contaminated drywall. The Senator noted that the cost of replacing drywall was prohibitively high for many families and that many people were forced to continue living in their homes while being exposed to the contaminated material. -------------- AQSIQ: Drywall Investigation a Priority... -------------- ¶3. (SBU) DDG Wang stressed to Senator Nelson the importance the Chinese Government places on the drywall issue, noting that Vice-Premier Wang Qishan had personally ordered AQSIQ to investigate the problem. He also indicated that he had been dispatched to Shanghai by AQSIQ Vice-Minister Wei Chuanzhong for the sole purpose of meeting with Senator Nelson on this issue. Wang added that he was aware the U.S. Consumer Product Safety Commission had already received over 600 complaints from January-June 2009 on contaminated Chinese drywall. -------------- -------------- ...But Has No Reports of Drywall Problems in China -------------- -------------- ¶4. (SBU) Nevertheless, DDG Wang claimed that AQSIQ had not SHANGHAI 00000367 002.2 OF 002 received any domestic complaints over Chinese-produced drywall and that AQSIQ researchers are "puzzled" over the cause of the contamination in the United States. According to Wang, AQSIQ's own testing of similar types of Chinese-produced drywall had failed to reveal chemical emission levels that fall outside international standards. In addition, Wang cited an independent investigation carried out on behalf of German drywall manufacturer, Knauf, which similarly did not find any problems with the company's Chinese-manufactured drywall. Therefore, Wang continued, it was impossible to draw conclusions about whether Chinese-produced drywall was responsible for the symptoms described by Senator Nelson. ¶5. (SBU) Wang did acknowledge, however, that AQSIQ only began inspecting drywall in 2009 after having been contacted by CPSC, which had expressed concern that tainted drywall recently discovered in the U.S. had originated in China. He indicated that it was impossible to trace gypsum used in drywall manufactured more than one year ago back to its source but did not elaborate on why this was the case. ¶6. (SBU) DDG Wang said that AQSIQ looked forward to continuing to work with the U.S. Consumer Products Safety Commission on this issue and noted that a CPSC experts group would be arriving in Beijing on August 17 on the heels of Senator Nelson's visit to further its investigation into the drywall problem. Wang also emphasized that AQSIQ had allocated special funding to conduct additional tests on Chinese-produced drywall but said that these tests were still ongoing and that one needed to wait for the tests' results before jumping to conclusions. -------------- Nelson: Reputation of Chinese Brands Harmed -------------- ¶7. (SBU) Senator Nelson emphasized that tainted drywall had further damaged the reputation of Chinese products, much like the 2007 lead-paint toy scandal. Wang responded by noting that AQSIQ had cooperated closely with the USG to address the lead-paint problem and that CPSC was now receiving fewer complaints about Chinese toys. He added that AQSIQ did not want the overall reputation of Chinese manufactured goods to suffer, stressing that AQSIQ had been very responsive to CPSC requests for information on drywall manufacturers, distribution companies, gypsum mines, etc. Wang admitted that, as a developing country, China still faced quality control problems with individual products but emphasized that individual cases should not provoke a reaction against all Chinese goods. -------------- POTUS May Discuss Drywall with Hu -------------- ¶8. (SBU) Senator Nelson concluded by stating that President Obama may raise the contaminated drywall issue when he meets with Chinese President Hu Jintao in November. The Senator expressed his hope that this issue would be resolved before then. ¶9. (U) Senator Nelson's delegation has cleared this message. CAMP