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UNCLAS SECTION 01 OF 02 GUANGZHOU 000128 
 
SIPDIS 
 
SENSITIVE 
SIPDIS 
 
STATE FOR EAP/CM 
USDOC FOR 4420/ITA/MAC/MCQUEEN, CELICO, DAS LEVINE 
STATE PASS USTR 
STATE PASS FEDERAL RESERVE BOARD FOR SCHINDLER 
USPACOM FOR FPA 
 
E.O. 12958: N/A 
TAGS: ECON EWWT PGOV CH
SUBJECT: Efforts on Sanshui Port Closure Stymied, but Re-opening 
Promised by FAO 
 
(U)  This document is sensitive but unclassified. 
 
¶1.  (U) Summary:  Members of an American Pyrotechnic Association 
(APA) delegation, the firework industry's main lobby group, told 
Congenoffs January 26 that the November 1 closure of Guangdong's 
Sanshui port, which handles approximately 60 percent of all 
fireworks shipments to the United States, continues to wreak havoc 
in the U.S. industry.  Following numerous inquiries by the Consulate 
on behalf of the APA - and a refusal by local officials to meet the 
issue - a Guangdong Foreign Affairs Office official told Congenoffs 
that the Sanshui port should re-open in the near term, thus avoiding 
any market damage.  End summary. 
 
Background 
---------- 
 
¶2.  (U) On November 1, the Sanshui Port in Guangdong's Foshan city, 
closed all shipments from the port, reportedly due to failed 
inspections and multiple accidents (none were fireworks-related) in 
¶2006.  The Sanshui port handles about 400-500 containers of 
fireworks per week (approximately 60 percent of China's fireworks 
exports).  U.S. fireworks-procurement companies have been scrambling 
to deal with the issue, as they may have had only one week's prior 
notice of the Chinese decision.  Currently there are only two 
functioning ports that can handle fireworks shipments, Guangzhou's 
Nansha Terminal (with capacity of about 80-100 containers) and a 
port in Shanghai, which has even lower capacity.  The APA is 
concerned that if fireworks shipments do not increase by March 1, 
their supply will be significantly harmed around the July 4 season. 
Firework production has not ceased production, thus Sanshui port has 
been forced to fill surrounding warehouses with thousands of 
containers of explosive fireworks, leading to a possible safety 
risk. 
 
Consulate Efforts on Behalf of APA 
---------------------------------- 
 
¶3.  (U) Prior to arrival in Guangzhou, the American Pyrotechnic 
Association (APA) group - four representatives, including APA 
President Stephen Frantz and Executive Director Julie Heckman - had 
held meetings about the Sanshui port closure with officials in 
Beijing and in Liuyang and Changsha (both in Hunan province). 
Liuyang, the historic birthplace of fireworks, is presently home to 
most of the world's fireworks manufacturing. 
 
¶4.  (U) Throughout December the Consulate's Economic/Political 
section (as well as Foreign Commercial Service) staff made many 
attempts to arrange meetings for the APA with the Sanshui port 
authorities and Foshan government officials, all of which were 
refused.  On January 11, the Consulate sent a dipnote to the 
Guangdong FAO requesting a meeting with the Vice Governor, which was 
also refused.  Finally on January 24, the Foshan government declined 
a meeting request because the issue was deemed a matter of "internal 
affairs." 
 
¶5.  (U) On January 25, Consular Section Chief and Congenoff held an 
emergency meeting with Guangdong FAO Deputy Director Luo Jun, and 
requested meetings with Sanshui and Foshan authorities.  Congenoffs 
noted that the Sanshui Port closure affected U.S. and Chinese 
companies, with annual shipments totaling over $179 million. 
Congenoffs also highlighted U.S. congressional interest.  On January 
26, Luo told Congenoffs he could not arrange any meetings, but he 
noted that an announcement would be forthcoming on an undisclosed 
date regarding the reopening of Sanshui Port and that all Fourth of 
July orders would arrive in time. 
 
APA Meeting:  Moving Forward 
---------------------------- 
 
¶6.  (SBU) On January 26, APA representatives told Congenoffs that in 
the past 40 years, there has never been a single fireworks shipping 
accident related to U.S.-bound fireworks.  Moreover, for 15 years, 
the fireworks business has had a rather smooth development in China. 
 APA President Frantz said that three fireworks-related explosions, 
widely reported in the media, had created a "crisis situation" for 
the industry.  Two of the explosions occurred on ocean-going vessels 
with Europe-bound cargo and one occurred at Hunan's Changsha port 
involving unpackaged fireworks.  One of the shipping accidents 
involved a vessel owned by the Korean firm Hyundai, which sends 
about 75 percent of all fireworks products to the United States.  In 
reaction to the explosion, Hyundai ceased all fireworks shipment. 
 
GUANGZHOU 00000128  002 OF 002 
 
 
Additionally, the Changsha port explosion was related to unpackaged 
fireworks materials that were improperly labeled. 
 
¶7.  (SBU) As a result, the APA group came to China focusing on three 
issues:  shipping, ports and classifications.  Frantz said that the 
number of shipping companies handling fireworks cargo had dwindled. 
Ports such as Sanshui have closed or limited fireworks shipments. 
Factory workers such as those in Liuyang have been poorly trained in 
properly labeling fireworks for shipment. 
 
¶8.  (SBU) Congenoffs promised to continue pursuing the issue and 
explained that the Sanshui port closure was not related directly to 
fireworks, but instead to a history of accidents, failed inspections 
and rampant smuggling.  Congenoffs encouraged the APA to support 
information exchanges between Chinese safety authorities and their 
U.S. counterparts in order to build better trust and to share best 
practice methods. 
 
GOLDBERG