VZCZCXRO9123
RR RUEHCN RUEHGH
DE RUEHGH #0631/01 2700316
ZNR UUUUU ZZH
R 270316Z SEP 07
FM AMCONSUL SHANGHAI
TO RUEHC/SECSTATE WASHDC 6291
INFO RUEHBJ/AMEMBASSY BEIJING 1427
RUEHHK/AMCONSUL HONG KONG 1024
RUEHSH/AMCONSUL SHENYANG 0899
RUEHCN/AMCONSUL CHENGDU 0898
RUEHGZ/AMCONSUL GUANGZHOU 0877
RUEHIN/AIT TAIPEI 0718
RUEHKO/AMEMBASSY TOKYO 0214
RUEHGV/USMISSION GENEVA 0015
RUCPDOC/DEPT OF COMMERCE WASHINGTON DC
RUEHRC/DEPT OF AGRICULTURE WASHINGTON DC
RUEHRC/DEPT OF AGRICULTURE USD FAS WASHINGTON DC
RUEATRS/DEPT OF TREASURY WASHINGTON DC
RHEHAAA/NSC WASHINGTON DC
RUEHGH/AMCONSUL SHANGHAI 6773

UNCLAS SECTION 01 OF 04 SHANGHAI 000631 
 
SIPDIS 
 
SENSITIVE 
SIPDIS 
 
STATE FOR EAP/CM AND EB 
STATE PASS USTR FOR STRATFORD/WINTER/ALTBACH/LOI/KATZ 
DOC FOR ITA - DAS KASOFF, CMCQUEEN, LRIGOLI, ESZYMANSKI 
DHS/ICE FOR IPR CENTER-DFAULCONER 
DHS/CBP FOR IPR RIGHTS BRANCH - PPIZZECK 
TREASURY FOR OASIA - DOHNER/HAARSAGER/CUSHMAN 
NSC FOR KURT TONG, JONATHAN SHRIER 
TREASURY FOR OASIA - CUSHMAN, WINSHIP 
 
E.O. 12958: N/A 
TAGS: ETRD TBIO PGOV ECON BEXP EAGR CH
SUBJECT: DISCUSSION OF FOOD SAFETY ISSUES WITH SHANGHAI'S CIQ 
LEADERSHIP 
 
 
(U) This cable is sensitive but unclassified and for official 
use only.  Not for distribution outside of USG channels. 
 
¶1.  (SBU) Summary: The Consul General and ATO Chief met 
September 20 with China Inspection and Quarantine (CIQ) Shanghai 
Director General Xu Jinji to discuss recent problems  with U.S. 
food products entering East China ports.  Xu said the United 
States and China must deepen the understanding of relevant 
inspection standards and procedures to avoid problems on both 
sides.  He said that China has taken measures over the past four 
months to ensure adequate product quality and safety for both 
imports and export.  For example, CIQ will be faster to revoke 
export licenses for companies that export items that violate CIQ 
standards.  CIQ is also beefing up internal coordination and 
cooperation with China Customs to reduce fraudulent and illegal 
shipments.  He welcomed further cooperation and information 
exchange at all levels.  End Summary. 
 
¶2.  (U) Xu was joined by Shanghai CIQ Vice Director Xu Chaozhe, 
Division Director for Supervision on Animal and Plant Zhou Guo 
Liang, Division Director for Supervision on Health Li Ping, 
Deputy Director for Foreign Affairs Li Riming.  Other Consulate 
officials included Agriculture Trade Office (ATO) Chief Wayne 
Batwin, ATO Officer and Econoff. 
 
Background:  Recent Problems At the Port 
 
---------------------------------------- 
 
¶3.  (SBU) Post requested the meeting with CIQ officials as part 
of our expanded outreach on food and product safety issues and 
to hear from CIQ about their recent U.S. visit.  In addition, we 
have encountered a number of problems recently with 
agricultural products imported from the United States.  These 
problems have complicated what has hitherto been a close and 
cooperative relationship between the Consulate and Shanghai CIQ. 
  For example, in the past few months, U.S. food products 
including pork, chicken, poultry, frozen entrees, drink mixes, 
and dried fruit have had problems entering China.  Many of these 
cases involve goods that have been previously imported but 
suddenly face restrictions, or enforcement of previously 
un-enforced regulations. 
 
¶4.  (SBU) For example, U.S. pork producers have imported meat 
with traces of ractopamine for years, although Chinese 
regulations prohibit the importation of such products.  Recently 
authorities have destroyed container loads of U.S. pork products 
at the port of Shanghai because they contained traces of 
ractopamine.  In addition, 618 California Wine Institute (CWI) 
bottles of wine were detained because they did not include 
Chinese labels for commercial purposes.  However, these bottles 
were intended for a seminar and tasting events hosted by CWI and 
the company did not previously have problems bringing similarly 
labeled bottles into China for such events.  A container of 
pre-fried frozen potatoes from ConAgra/Lamb Weston was recently 
destroyed at Ningbo Port as a result of test results that 
indicated they did not meet Chinese standards.  Contrary to 
normal procedures and regulations, CIQ did not give the company 
the opportunity to re-export the goods or 15 days of 
notification prior to the decision. 
 
Predictability and Transparency 
 
------------------------------- 
 
¶5.  (SBU) The CG noted U.S. businesses' frustration over the 
difficulty in understanding and following Chinese standards and 
regulations, which seem to be inconsistently implemented. 
Transparency and predictability are very important for U.S. 
 
SHANGHAI 00000631  002 OF 004 
 
 
exporters to China and that is why the two sides need clear 
channels of communication.  He raised the CWI's 618 exemplar 
bottles of wine as a case in point.  Batwin gave the example of 
CIQ not providing inspection lab results to companies. 
Companies want to know how to replicate these tests so they can 
better understand how to meet Chinese standards.  Xu Chaozhe 
responded that what may seem like a simple case can actually be 
very complicated.  In addition, many U.S. exporters erroneously 
believe that Chinese standards are higher than U.S. standards, 
but in reality most U.S. standards are stricter.  Director Xu 
said Chinese products face similar problems in other countries. 
 
 
CIQ's Current Priorities 
 
------------------------ 
 
¶6.  (SBU) Director Xu noted that product safety is a common 
concern for many countries, and stressed that China has 
implemented serious measures during the past four months to 
improve standards and the quality of exports.  China wants to 
ensure its products are accepted by other countries.  The CG 
inquired about the impact of Central Government decisions on 
CIQ's work and noted that Shanghai recently established a new 
leading group to implement the State Council's order on food 
safety.  (Note:  The Shanghai group has met twice and came out 
with the program called "3 Areas of Emphasis; 8 Aspects; and 28 
Objectives.") 
 
¶7.  (SBU) According to Xu, CIQ has its own action plan and is 
overseeing 6 working groups on the front inspection line to 
improve quality and safety.  Even if they find the smallest 
problem, they are taking "corrective measures."  For example, 
export companies with the smallest infractions will have their 
export licenses revoked.  After the company takes corrective 
measures and passes a follow-up inspection by CIQ, it can then 
have its license reinstated.  CIQ now requires that all food 
exports have the CIQ mark, and this marking system will soon 
expand to other products as well.  Xu also emphasized that the 
majority of substandard export products in the past were 
"illegal" exports, and CIQ is trying to stamp out exports that 
are sent without the proper approval. 
 
Imported Food Safety in Important to China Too 
 
--------------------------------------------- - 
 
¶8.  (SBU) Regarding inconsistencies in import procedures, Xu 
Chaozhe remarked that China also takes the safety of food and 
other product imports very seriously.  Sometimes it is difficult 
to distinguish between goods brought for exhibition purposes and 
those for commercial purposes, and some importers abuse this 
system to avoid proper approval procedures.  The front-line 
inspectors must make a judgment call according to the number of 
items involved and the specific circumstances.  Xu added that 
CIQ Shanghai will look at this problem, and China may adopt 
special procedures to manage products that are brought for 
exhibition purposes.  To help avoid shipping delays, ATO Batwin 
offered the services of the ATO office in helping CIQ determine 
if U.S. agriculture products are for commercial use or other 
purposes.  He also said ATO is willing to continue assisting on 
the verification of U.S. inspection certificates. 
 
CIQ's Internal Interaction with China Customs 
 
--------------------------------------------- -- 
 
¶9.  (SBU) According to Xu Chaozhe, CIQ Shanghai has good 
cooperation with the ports and China Customs and has learned 
 
SHANGHAI 00000631  003 OF 004 
 
 
from the U.S. example on coordination.  Customs can only release 
products after getting a CIQ clearance.  Customs also relies on 
CIQ guidance to better understand the nature of certain products 
and how to classify them under the Harmonized Tariff System.  Xu 
added that CIQ is moving from a paper to an electronic approval 
system that will speed the approval process and provide more 
integrity in the system.  Regarding joining Customs e-platform 
network that is being created in the Yangtze River Delta (YRD), 
CIQ has partially implemented this system and is using it on a 
trial basis.  Once completed, CIQ offices throughout the YRD 
will be able to base clearance on the approvals given by other 
offices in network. 
 
CIQ Internal Coordination 
 
------------------------- 
 
¶10.  (SBU) Xu Chaozhe described CIQ's efforts to improve 
internal coordination on issues, noting if one CIQ office 
encounters a problematic shipment it notifies other CIQ offices. 
 CIQ offices only report serious problems and use a procedure of 
first reporting to CIQ headquarters in Beijing, which in turn 
sends out a general message to all CIQ offices.  CIQ offices 
then increase their vigilance and inspections of similar types 
of shipments.  CIQ in Shanghai is also increasing coordination 
within its local offices that cover the various ports in the 
city. 
 
CIQ's Recent Trip to the U.S. 
 
----------------------------- 
 
¶11.  (SBU) Xu Chaozhe was part of a group of Shanghai and Ningbo 
CIQ officials that recently visited the United States on an 
ATO-sponsored food safety program.  In addition to visiting 
farms and ports, CIQ officials held in-depth discussions on 
American regulations and inspection/quarantine operations with 
their U.S. counterparts.  Xu said the visit was useful in 
deepening his understanding of U.S. procedures, noting there are 
many similarities between the two systems.  He said in some 
areas the United States inspection system was better than 
China's; however, both sides could "optimize their 
organizational structures."  Although he was pleased with the 
trip, he said it would have been better to stay in one place and 
gain a deeper understanding rather than try to cover so many 
places and such a broad array of topics.  Xu will file a report 
with CIQ headquarters in Beijing about his findings from the 
trip. 
 
Strengthening Ties and Increasing Communication 
 
--------------------------------------------- -- 
 
¶12.  (SBU) Director Xu noted that CIQ has excellent cooperation 
with the U.S. Consulate and would like to see more exchange of 
information at all levels.  The upcoming program between ATO and 
CIQ in October will be a great opportunity for the two sides to 
exchange views on inspection standards and regulations and keep 
goods smoothly flowing between the two countries.  (Note:  ATO 
and CIQ Shanghai will co-host a Food Safety Seminar on Oct 10. 
Speakers at the seminar will include professionals from USDA, 
EPA and FDA.)  Xu also welcomed the opportunity to set up a 
study tour of CIQ port facilities and discussion of the new 
Chinese food safety export controls.  The U.S. Consulate could 
forward requests and issues to his office, and he would be happy 
to respond. 
 
Bio Note 
 
 
SHANGHAI 00000631  004 OF 004 
 
 
-------- 
 
¶13.  (SBU) Director Xu Jinji, a native of Jiangsu Province, has 
been on the job for one month in Shanghai.  He previously served 
in the Ningbo CIQ office for 6 and a-half years and also at the 
CIQ office in Nanjing.  He attended the Shanghai International 
Studies University from 1977-1980 as a graduate student, and has 
visited the U.S. twice.  His English comprehension skills were 
stronger than his speaking ability, which was at a general 
conversational level. 
KJARRETT