VZCZCXRO0728
RR RUEHCN RUEHGH RUEHVC
DE RUEHGZ #0911/01 2270919
ZNR UUUUU ZZH
R 150919Z AUG 07
FM AMCONSUL GUANGZHOU
TO RUEHC/SECSTATE WASHDC 6373
RUEHOO/CHINA POSTS COLLECTIVE
RUEAUSA/DEPT OF HHS WASHDC
RUEATRS/DEPT OF TREASURY WASHDC
RUEAHLC/HOMELAND SECURITY CENTER WASHINGTON DC
RUCPDOC/DEPT OF COMMERCE WASHDC
RUEHRC/DEPT OF AGRICULTURE WASHINGTON DC
RUEAIIA/CIA WASHDC
RUEKJCS/DIA WASHDC

UNCLAS SECTION 01 OF 02 GUANGZHOU 000911 
 
SIPDIS 
 
 
SENSITIVE 
SIPDIS 
 
STATE PASS TO USTR 
STATE FOR EAP/CM 
 
E.O. 12958: N/A 
TAGS: ETRD ECON PGOV CH
SUBJECT: Chinese Inspectors Blame U.S. Media and Unlicensed 
Workshops for Consumer Product Safety Problems 
 
 
¶1. (SBU) Summary: Guangzhou Technical Supervision Bureau (TSB) 
Deputy Director General Liu Shu Biao blamed an overly negative U.S. 
media and unlicensed workshops for China's recent spate of 
high-profile product safety recalls.  Despite the defensiveness of 
his remarks, he said that the central governmentQs recently 
announced safety regulations for food products showed Beijing's 
commitment to addressing consumer safety concerns.  Details 
regarding implementation of these new regulations have yet to be 
determined.  End Summary. 
 
Guangzhou TSB's Role in Consumer Product Safety: A Small Sliver of 
the Pie 
--------------------------------------------- --------- 
 
¶2.  (U) The Guangzhou TSB conducts quality inspections at factories 
and plants here to ensure companies comply with the mandatory 
standards set by the national authorities in Beijing.  They also 
conduct safety inspections of certain infrastructure, such as 
elevators, fire engines and gas stations.  Their mandate only covers 
products made for the domestic market, and they are only responsible 
for goods while in production on the factory floor.  Once the goods 
leave the factory, another bureau -- the State Administration of 
Industries and Commerce (SAIC) -- takes over quality control 
monitoring.  Yet another agency -- the General Administration of 
Quality Supervision, Inspection, and Quarantine (AQSIQ) -- covers 
all export and import products. 
 
¶3.  (U) Up until 2005, the TSB operated as a separate government 
bureau on both the national and local levels.  In 2005, however, the 
national TSB along with several other bureaus were combined to form 
AQSIQ.  At the local level, the TSB, SAIC and AQSIQ all continue to 
operate as independent bureaus. 
 
Eleven Agencies, Thousands of Offices and Little Coordination or 
Cooperation 
--------------------------------------------- ---- 
 
¶4.  (SBU) The Guangzhou TSB is just one of thousands of TSBs around 
the country; each level of local government has its own TSB.  In a 
meeting on August 10, 2007, Deputy Director General Liu explained to 
Conoffs that all regulations and standards governing consumer 
product safety are set in Beijing and implemented countrywide by 11 
different agencies each with offices at various levels of 
government.  He seemed surprised when asked if any coordination 
existed between the various agencies and TSBs. He replied that 
although he knew some of the other leaders personally, there was no 
formal coordination or cooperation. 
 
U.S. Media Exaggerates the Consumer Safety Problem 
--------------------------------------------- ----- 
 
¶5.  (SBU) Liu blamed the U.S. media for exaggerating the scope of 
the consumer safety problem in China.  He argued that the quality 
control of Chinese goods had been consistently good the last couple 
of years.  Every food and industrial product manufactured in 
Guangzhou is sampled for inspection.  Food products are sampled six 
times a year and have approximately a 90 percent pass rate; other 
industrial products are sampled once or twice a year and have about 
an 80 percent pass rate.  Although he did not know the precise 
numbers, he said export goods had an even higher pass rate.  Liu 
believes Chinese products are of an even higher quality than 
American products, claiming that more Chinese goods pass Japan's 
strict import regulations than American goods. 
 
Unlicensed Workshops -- The Source of the Problem 
--------------------------------------------- ---- 
 
¶6.  (SBU) On several occasions during the meeting with Conoffs, Liu 
and his TSB colleagues stated their concern that small, unlicensed 
workshops are not abiding by safety guidelines, and that these 
outfits are tarnishing the reputation of China's exports.  Liu 
commented that many of these workshops were run by farmers or 
business owners, who were operating on the margins and did not have 
enough money to obtain the required licenses.  He said many of these 
small business owners were aware that their quality standards were 
below those mandated nationally and therefore did not attempt to get 
licenses.  To address this problem, the TSB is about to launch a 
campaign to close down all unlicensed shops in the city of 
Guangzhou. 
 
GUANGZHOU 00000911  002 OF 002 
 
 
 
The July 26th Special Rules 
--------------------------- 
 
¶7.  (U) The TSB officials stressed Beijing's passing of new 
regulations -- which they called the July 26th Special Rules -- as 
proof that the central government is taking action to address 
consumer product safety concerns.  Liu told us that the new 
regulations call for stricter controls on inputs and raw materials 
used in making final food products.  The TSB officials said these 
regulations may later be expanded to apply to other products besides 
food. They noted the new regulations carry the weight of law, 
stipulate stricter enforcement of already existing laws, levy 
heavier penalties for violators, and place greater responsibility on 
government officials.  Lastly, the regulations outline stricter 
safety controls on export and import products.  The Guangzhou TSB is 
now in the process of deciding how to implement the new regulations. 
 Although the provincial Guangdong TSB held a conference on July 30 
with over 3,000 government officials and food manufacturing company 
leaders, no implementation guidance on new rules was set. 
 
Guangzhou's Consumers Not Too Concerned About Consumer Product 
Safety 
--------------------------------------------- --------- 
 
¶8.  (U) Guangzhou consumers are apparently more concerned about 
product safety than they have been in the past but no where near as 
concerned as American consumers.  TSB officials said that there were 
two main reasons for the increase in concern.  First, due to 
improved testing technology, TSB now detects more problems than it 
had before.  Second, as wages increase, consumers pay greater 
attention to the quality of the goods they buy. 
 
Comment 
------- 
 
¶9.  (SBU) ConGen Guangzhou has a good relationship with officials at 
the Guangzhou TSB.  All of the four officials we met with have been 
to the U.S., and one of them studied in Los Angeles for one year. 
In the past, setting up meetings with them only required a direct 
phone call.  This time, however, the TSB officials told us they 
needed prior Foreign Affairs Office approval to meet.  This change 
reflects the growing sensitivity of consumer product safety issues 
and perhaps even the greater outreach of the FAO on all issues about 
which the consulate inquires (in itself, a continuing and disturbing 
trend). 
 
¶10.  (SBU) The TSB officials came across as somewhat defensive and 
deflected blame away from sources of the problem that reflected on 
China.  However, because all of them had been to the United States 
and were somewhat familiar with the U.S. regulatory system, they had 
a basis for comparison that many other Chinese officials lack.  They 
repeated several times that their procedures and the challenges they 
faced were "just like in the U.S."  Although some of these 
comparisons were inaccurate, it was clear they understood procedures 
for ensuring consumer product safety.  Nevertheless, they lamented 
that many of those methods wouldn't work in China since local 
conditions differ from conditions in the U.S. 
 
GOLDBERG