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### Viewing cable 07BEIJING6018, AQSIQ AND STAFFDEL DISCUSS IMPROVEMENTS TO CHINA'S

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Reference ID | Created | Released | Classification | Origin
--- | --- | --- | --- | ---
07BEIJING6018 | 2007-09-14 05:37 | 2011-08-23 00:00 | UNCLASSIFIED//FOR OFFICIAL USE ONLY | Embassy Beijing

`

    VZCZCXRO1380
    PP RUEHCN RUEHGH RUEHVC
    DE RUEHBJ #6018/01 2570537
    ZNR UUUUU ZZH
    P 140537Z SEP 07 ZDK
    FM AMEMBASSY BEIJING
    TO RUEHC/SECSTATE WASHDC PRIORITY 1807
    INFO RUCPDOC/USDOC WASHDC
    RUEAUSA/DEPT OF HHS WASHINGTON DC
    RUEATRS/DEPT OF TREASURY WASHINGTON DC
    RHMFIUU/DEPT OF HOMELAND SECURITY WASHINGTON DC
    RUCPDOC/DEPT OF COMMERCE WASHDC
    RULSDMK/DEPT OF TRANSPORTATION WASHDC
    RUEAWJA/DEPT OF JUSTICE WASHINGTON DC
    RUEHRC/DEPT OF AGRICULTURE WASHDC
    RHEHNSC/NSC WASHDC
    RUEAEPA/HQ EPA WASHDC
    RUEHOO/CHINA POSTS COLLECTIVE

` `

    UNCLAS SECTION 01 OF 05 BEIJING 006018

    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
    COMMERCE FOR ITA/HIJIKATA AND CINO
    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: TBIO EAGR ECON HHS ETRD BEXP CH JA
    SUBJECT: AQSIQ AND STAFFDEL DISCUSS IMPROVEMENTS TO CHINA'S
    EXPORT CERTIFICATION SYSTEM

    REF: A. Beijing 5273
    ¶B. Beijing 5899
    ¶C. Beijing 3210
    ¶D. Beijing 3174
    ¶E. Beijing 3252

    BEIJING 00006018  001.2 OF 005

    ¶1.  (SBU) This report is Sensitive But Unclassified, for
    official United States Government use only and not for
    release to the media.

    ¶2.  (SBU) SUMMARY:  A Congressional Committee on Commerce
    and Energy Staff Delegation led by investigator David
    Nelson met China's food safety ministerial and regulatory
    authorities August 19-24 to evaluate China's export food
    safety system and examine ways to enhance the safety of
    food exports to the United States. AQSIQ officials
    explained in detail the structure of their "system within a
    system" for export certification and their comprehensive
    electronic management system, even discussing with Staffdel
    additional ways to strengthen China's export regime through
    a dual positive list/blacklist, an "exporter fast-track"
    system that would adjust testing frequency to past
    performance, the possibility of increasing inspection
    rates/audits, and having China-based U.S. inspectors.
    Still, AQSIQ officials were hard-pressed to recap in detail
    the cause of contaminated plant proteins and fishery
    product shipments to the United States earlier this year.
    In another meeting, American Chamber of Commerce member
    firms suggested the United States could benefit from a
    Japanese-style regime that restricted the number of
    eligible exporters and provided for systems audits and
    supplemental testing by both governments. Staffdel members
    gave Chinese officials insight into the draft bill in
    development by the Committee modifying the current Food and
    Drug Act. END SUMMARY.

    AQSIQ REPEATS TALKING POINTS -- AGAIN
    -------------------------------------

    ¶3.  (SBU) General Administration for Quality Supervision,
    Inspection, and Quarantine (AQSIQ) Vice Minister Wei
    Chuangzhong, Director General Wang Daning, and six other
    high-level AQSIQ food safety policy and regulatory
    officials met Congressional Committee on Commerce and
    Energy Staff Delegation led by investigator David Nelson to
    discuss the safety of food exports to the United States.
    Reiterating official talking points, Vice Minister Wei
    recited evidence of the effectiveness of China's export
    certification system and its superior performance compared
    to the U.S. system.  He complained that international press
    attention on this matter was disproportionate to the impact
    of the issue and sometimes factually wrong.  He further
    suggested, as other Chinese officials have in private
    meetings with emboffs and in public fora, that some are
    using the press to promote a protectionist U.S. trade
    agenda.  Wei also complained about specific cases of
    substandard or unsafe U.S. goods, noting that China has
    worked on technical and scientific levels to resolve the
    issues and keep them from the press. (Note: Contrary to
    Vice Minister Wei's assertion, China has released
    information about some of these cases to the press (Ref.
    A), including the names of specific U.S. firms. End Note.)
    Finally, Wei praised the AQSIQ food export certification
    system, suggested that previous problems were due to the
    lack of U.S. understanding of the system, and called on the
    United States to back AQSIQ's existing program.  (Note:

    BEIJING 00006018  002 OF 005

    Chinese ministries have now closely coordinated talking
    points regarding the efficacy of AQSIQ's system and the
    quality rate of Chinese exports versus U.S. exports, points
    that are recited to media and U.S. government
    representatives. (Ref. B) End Note.)

    FOOD EXPORT CERTIFICATION:
    A SYSTEM WITHIN A SYSTEM
    --------------------------

    ¶4.  (SBU) AQSIQ provided details of their overall food
    export certification system and its structure. Export
    certification is a "system within a system" that isolates
    exported food from the domestic food supply.  The first
    stage of export certification actually begins at the farm,
    part of the "farm-to-fork" surveillance system, with the
    registration of the farm or production facility. In the
    case of farmed fish, the farmer or company that owns the
    pond or pen is required to gain AQSIQ export accreditation.
    This entity may only supply fish to a processor that is
    also accredited with AQSIQ.  With an export certification,
    every step of the production and export process from
    primary production to product acceptance by the final
    exporting company must gain AQSIQ accreditation.  Each part
    of this chain is supposed to know and adhere to Chinese
    standards or the importing country standards, whichever is
    stricter.  The accreditation is done either by AQSIQ or the
    Certification and Accreditation Administration (CNCA), a
    subsidiary of AQSIQ. CNCA is responsible for the sanitary
    registration for those firms engaged in import and export
    of foods.  CNCA also engages in the inspection, auditing
    and approval for food import and/or export firms,
    maintaining the register of approved firms and assuring
    that they meet foreign requirements as necessary.

    CHINA HAS AN ADVANCED ELECTRONIC
    SYSTEM -- AND ROOM FOR IMPROVEMENT
    ----------------------------------

    ¶5. (SBU) Beijing's local Entry and Exit Inspection and
    Quarantine Bureau (CIQ) officials explained in detail the
    process and types documents that accompany shipments in the
    final phase of AQSIQ certification.  First, a local CIQ
    staff member inspects and tests in a CIQ lab every export
    shipment according to specific parameters of both China and
    the importing country.  Second, paper documents attesting
    to the results are returned to the manufacturing or
    processing company. Third, the exporter prepares the entire
    export document portfolio for submission, in person, to the
    local CIQ. The portfolio includes the firm's registration,
    the lab results done on the product to be exported,
    veterinary or phytosanitary certificates, special quality
    certification, shipping documents, and customs forms. The
    CIQ export officer crosschecks the paper documents with an
    electronic database that contains the food exporter
    registration number and the lab test results. The Staffdel
    noted that AQSIQ's electronic certification and filing
    system (incorporating electronic record keeping,
    certificates, and export shipment traceability) is an
    example of an advanced system. The potential exists,
    staffdel leader Nelson said, for it to form the backbone of
    an electronic certification system that would allow U.S.
    inspectors easier, electronic validation, and verification
    of official Chinese documents and possibly limit
    opportunity to produce fraudulent or fake paper
    certificates.

    BEIJING 00006018  003.2 OF 005

    ¶6. (SBU) AQSIQ officials claimed that the system could be
    used to prevent recurring food safety problems, noting that
    the system could be altered to provide electronic
    information to trading partners so they could independently
    verify documents.  Officials also touted AQSIQ's "positive
    list," a selective list determined in cooperation with
    importing nations to limit the number of exporters.
    Japanese importers employ this type of list for chicken,
    eels, and vegetables. The list includes only those
    importers who can prove they meet the importing country's
    standards. A separate "blacklist" identifies repeat
    offenders that fail to meet these standards. AQSIQ and
    staffdel discussed the possibility of operating a two-list
    system, although the United States currently only accepts
    a "blacklist," not a positive list. The two sides also
    discussed the notion of an "exporter fast-track" system
    that would adjust testing frequency to past performance,
    the possibility of increasing inspection rates/audits, and
    having China-based U.S. inspectors. These methods could
    potentially help close loopholes in China's system.

    LOOPHOLES ARE HARD TO PIN DOWN
    ------------------------------

    ¶7. (SBU) When discussing the weaknesses of the Chinese
    export certification system, officials were hard-pressed to
    answer basic questions about loopholes that were exposed
    when melamine-contaminated plant proteins and farm-raised
    fish with illegal chemical residues were exported to the
    United States. (Note: FDA site investigations in the
    melamine incident (Refs. C, D) and discussions with AQSIQ
    revealed that manufacturers can classify their export
    products as "industrial," exempting them from AQIQ food
    quality export checks; in other words the plant proteins
    in that case were not required to be certified by AQSIQ
    because they were not initially classified as food
    products. End Note.) With regard to fraud prevention,
    officials did not describe AQSIQ's recent measures
    requiring melamine-free certification and inspection in
    addition to export certification for all plant proteins.
    Officials were unable to explain effectively how fishery
    products repeatedly passed quality tests and slipped into
    the export market with levels of residual chemicals not
    allowed by the United States, especially in light of
    China's policy to apply the same level of scrutiny and
    standards regardless of whether the importing country
    accepts the Chinese certification.  (Note: The United
    States does not accept Chinese certification.)

    OTHER AGENCIES BLAME AQSIQ
    AND STEER CLEAR OF SUBSTANCE
    ----------------------------

    ¶8.  (SBU) Discussions with Ministry of Agriculture (MOA),
    Ministry of Health (MOH), and State Food and Drug
    Administration (SFDA), left the delegation frustrated that
    the Chinese side did not have any new ideas to present.
    Chinese counterparts seemed to avoid any opportunity for
    questions and exchange of ideas on how to improve their
    food safety procedures. MOA Market and Information
    Department Director Mr. Zhang Yanqiu led a round table
    discussion with specialists from four MOA departments.
    Zhang repeated many of AQSIQ's facts about export quality
    and described provincial-municipal coordination of primary
    food safety monitoring and supervision.  He noted the

    BEIJING 00006018  004.2 OF 005

    important role played by regional and local authorities in
    coordinating adherence to the four types of quality
    standards pertinent to food/feed producers: national,
    local, industry, and enterprise. When asked about reports
    of wide-scale use of melamine as an additive to plant
    proteins in China, Zhang said that extensive MOA tests have
    only shown isolated cases.  Each ministry representative
    deflected thorny export quality questions by pointing a
    finger at AQSIQ.

    JAPAN'S IMPORT SYSTEM AS A MODEL?
    ---------------------------------

    ¶9.  (SBU) Staffdel met American Chamber of Commerce members
    August 22 at Beijing's Committee on Food and Agriculture.
    The AmCham group acknowledged a lack of regulatory
    enforcement in the standard AQSIQ export certification
    regime.  Two members noted that their firms require
    employees to duplicate surveillance and testing to ensure
    that export product quality meets the demands of their
    customers. Success in quality, another member said, is
    something that requires constant attention.  Member
    companies also focused their comments on AQSIQ's changes to
    suit strict Japanese import requirements.  Some of these
    measures include a restricted number of eligible exporters,
    systems audits, and supplemental testing by both the
    Japanese and Chinese government agencies responsible for
    those food products.  It was noted during the official
    meetings that the additional measures that China currently
    takes for exports to Japan could potentially be applied to
    exports to the United States (e.g., limiting the number of
    approved suppliers would make inspection and adherence to
    quality standards easier to verify).

    COMMENT: TRUST BUT VERIFY
    -------------------------

    ¶10. (SBU) The Staffdel was reassured about the strengths of
    many aspects of China's export inspection system, but left
    wanting additional reassurances that loopholes allowing
    repeated exports of contaminated fish can be eliminated.
    An electronic export certification system has clear
    benefits for AQSIQ's role in China's massive export market,
    with a large decentralized system of 35 CIQs in addition to
    31 mainland local/city Technical Supervision Bureaus (TSBs)
    that provide additional quality monitoring.  One staffel
    member commented that, if Chinese regulatory officials do
    everything they say they do, and one puts aside problems
    like endemic corruption, then the Chinese system is
    qualitatively better than the U.S. system. (This would also
    assume that China's inspectors operate with the same degree
    of integrity, that random or scientific sampling occurs
    from every batch of exported food, and that samples are
    tested in laboratories staffed by dispassionate public
    servants and are appropriately trained and capable to
    perform the required tests, so that their seal represents a
    true certification.)  The missing link is China's assurance
    that their methods of analysis are verifiable and that
    their certification systems can be checked electronically
    to remove the fraudulent paper trails that seem to keep
    appearing.  Staffdel members commented further that China's
    reaction to food safety problems has been "finger-in-the-
    dike." The government's tough talk on food safety has yet
    to catch up to all the exports landing in the United
    States. Importers are going to "get what they inspect --
    not what they expect." There are few absolutes in China's

    BEIJING 00006018  005.2 OF 005

    existing export system, but flexibility to new approaches
    and verification of results could be the keys to
    improvement.

    RANDT

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