VZCZCXRO7460
RR RUEHCN RUEHVC
DE RUEHGH #0285/01 2100908
ZNR UUUUU ZZH
R 280908Z JUL 08
FM AMCONSUL SHANGHAI
TO RUEHC/SECSTATE WASHDC 7001
INFO RUEHOO/CHINA POSTS COLLECTIVE
RUEHKO/AMEMBASSY TOKYO 0333
RUEHGV/USMISSION GENEVA 0031
RUCPDOC/DEPT OF COMMERCE WASHINGTON DC
RUEHRC/DEPT OF AGRICULTURE WASHINGTON DC
RUEATRS/DEPT OF TREASURY WASHINGTON DC
RHEHAAA/NSC WASHINGTON DC
RUEHGH/AMCONSUL SHANGHAI 7571

UNCLAS SECTION 01 OF 03 SHANGHAI 000285 
 
SENSITIVE 
SIPDIS 
 
STATE FOR EAP/CM AND EB 
STATE PASS USTR FOR STRATFORD/WINTER/ALTBACH/KATZ 
DOC FOR ITA - DAS KASOFF, CMCQUEEN, 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: SHANGHAI'S CIQ LEADERSHIP CALLS FOR MORE COOPERATION 
 
SHANGHAI 00000285  001.2 OF 003 
 
 
(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 (CG) met July 17 with 
China Inspection and Quarantine (CIQ) Shanghai Director General 
Xu Jinji to discuss ways the two sides can work closer together 
on information sharing.  CG noted that the U.S. Food and Drug 
Administration would soon open an office in Shanghai and 
welcomed CIQ's close cooperation with FDA staff.  Xu welcomed 
more information and training opportunities.  He also emphasized 
Shanghai CIQ's willingness to resolve import and export issues 
with the Consulate.  In an earlier meeting at Shanghai's 
Waigaoqiao Port, Xu outlined CIQ's efforts to improve food and 
product safety and Shanghai CIQ's general operations.  He 
believes the primary reason unqualified products enter the 
States are divergent requirements and regulations between the 
two sides.  End Summary. 
 
¶2.  (SBU) Xu was joined by Shanghai CIQ Vice Director Xu 
Chaozhe, Division Director for Supervision on Health He Yuping, 
Division Director for Supervision on Animal and Plant Zhou Guo 
Liang, and Deputy Director for Foreign Affairs Li Riming.  Other 
Consulate officials included Agriculture Trade Office (ATO) 
Chief Wayne Batwin, ATO Officer and Econoff. 
 
Context:  Holdups with CIQ Inspection Improving 
--------------------------------------------- -- 
 
¶3.  (SBU) In 2007, the Consulate encountered a spate of issues 
with U.S. agricultural imports at Shanghai ports.  Many of these 
cases involved goods that had been previously imported but 
suddenly faced restrictions or enforcement of previously 
un-enforced regulations.  The situation seems to be improving, 
although issues still arise over U.S. agriculture imports.  CIQ 
has generally been very cooperative in resolving problems.  It 
has also been cooperative on other fronts, including meeting 
with the Health and Human Services Secretary in May and Food and 
Drug Administration officials in July.  In addition, the 
Consulate has also had successful training events with CIQ over 
the past year.  For example, ATO and CIQ Shanghai co-hosted a 
Food Safety Seminar in October 2007.  CIQ officials also 
recently attended an industry training program arranged by ATO. 
Other planned training programs have been postponed until 2008 
due to budget consideration on the Chinese side. 
 
Predictability and Transparency 
------------------------------- 
 
¶4.  (SBU) At the July 17 meeting, the CG said U.S. exporters to 
China would welcome additional guidance as China's regulations 
governing food and product safety evolve.  Xu also urged the 
U.S. side to cooperate closer on providing guidance on U.S. 
regulatory changes that affect exporters from China.  Training 
and clarification of standards would help the respective 
countries' exporters meet standards and ultimately improve food 
and product safety in both countries.  In this regard, Xu 
welcomed the establishment of an FDA office in Shanghai and 
promised to work closely with the FDA staff. 
 
¶5.  (SBU) Xu noted that all new regulations and policies can be 
viewed on CIQ's website, which provides information in English 
as well as Chinese, though many foreigners are unaware of the 
website.  In addition, CIQ plans to establish a new hotline to 
field inquiries regarding rules and procedures for CIQ 
clearance.  Xu added that this will be a channel for foreigners 
to inquire directly for clarification on issues.  Currently, 
most foreigners inquire through their embassies or consulates. 
CIQ also occasionally provides training seminars for foreign 
traders and asks for feedback on CIQ's work.  Deputy Director Xu 
Chaozhe added that CIQ not only welcomes information and 
feedback on U.S. imports to Shanghai, but also wants to hear 
about quality issues on Shanghai area exports to the U.S. 
 
U.S. Pork Exports Still an Issue 
-------------------------------- 
 
¶6.  (SBU) ATO Chief inquired whether there was any change in 
 
SHANGHAI 00000285  002.2 OF 003 
 
 
Shanghai's policy regarding inspection for ractopamine residue 
in U.S. pork.  (Note:  U.S. pork producers have legally produced 
imported meat with traces of ractopamine for years, although 
Chinese regulations prohibit the importation of such products. 
In early 2007, authorities began rejecting container loads of 
U.S. pork products at the port of Shanghai because they 
contained traces of ractopamine.  However, in the fall of 2007, 
Chinese officials temporarily suspended the enforcement of the 
regulation.  Recently, enforcement of the regulation appears to 
have resumed.  End note.)  Director General Xu replied that 
there was no change in China's policy on ractopamine.  Traces of 
ractopamine had been detected in U.S. pork and therefore U.S. 
pork was subject to closer scrutiny.  Since the E.U. prohibits 
the use of ractopamine and no traces have been found in their 
pork exports, CIQ does not inspect them as closely.  Xu 
emphasized there were only two ways for the ractopamine issue to 
be resolved; either both countries agree to acceptable levels of 
ractopamine, or the U.S. bans the use of the substance in pork. 
 
CIQ's Olympic Work 
------------------ 
 
¶7.  (SBU) In response to CG's inquiry on the effect of the 
Olympics on CIQ's activities, Xu said there was little 
influence.  However, CIQ has beefed up its inspection efforts on 
steroids and other additives in food that might be consumed by 
athletes. 
 
Shanghai CIQ: Big Workload with Few Resources 
--------------------------------------------- 
 
¶8.  (SBU) During an earlier meeting with Consulate officials at 
Shanghai's Waigaoqiao Port, Xu emphasized that food safety is a 
concern for both countries and that Shanghai CIQ is doing its 
part to ensure the safety of food being sent to the United 
States from Shanghai ports.  Deputy Director Xu gave an overview 
of the Shanghai operations, noting that with only 1,600 
employees, Shanghai CIQ must oversee quality inspection and 
quarantine operations at China's busiest port.  On a yearly 
basis, Shanghai CIQ must inspect approximately 250,000 batches 
of export goods and 330,000 batches of import goods, many of 
which include plant and animal derived products.  To conduct 
these inspections, Shanghai CIQ maintains 13 branches in 
Shanghai port facilities, cargo distribution centers, and other 
locations, as well as 4 technical centers, one of which is 
devoted to the inspection of imported and exported food. 
 
¶9.  (SBU) Xu pointed out that Shanghai is currently the world's 
busiest port in tonnage terms, handling over 600 million tons of 
cargo throughput in 2007, of which 250 million tons was foreign 
traded goods.  The value of the 2007 trade volume through 
Shanghai's port totaled over USD 520 billion, a 21.5 percent 
increase over the previous year.  Container throughput is now 26 
million TEU in 2007, a 20.4 percent increase over 2006. 
Shanghai is now second only to Singapore in container 
throughput.  In 2007, Shanghai's port handled 256,226 batches of 
food throughput, valued at USD 2.8 billion. 
 
Shanghai CIQ Tough on Import and Export Quality 
--------------------------------------------- -- 
 
¶10.  (SBU) Of the imported batches of food, most came from the 
United States, Canada, E.U., Australia, S.E. Asia and Japan, and 
375 batches, or 7.89 percent of total imported batches were 
found to be unqualified.  The major reasons for import 
disqualification include microorganisms, drug residue, 
deterioration and exhausted expiration dates.  According to Xu, 
Chinese exports were disqualified mostly for drug residue and 
pesticides reasons, although the qualification rate was 99.6 
percent.  He acknowledged that Shanghai does not have a 
developed food production industry and the export value of food 
exported through Shanghai is very small.  In 2007, only 12,493 
batches of food were exported with a value of USD 417.6 million. 
  Most of the food exports were destined for the U.S., Japan, 
E.U., Australia, New Zealand, Hong Kong, and South East Asia. 
 
 
 
SHANGHAI 00000285  003.2 OF 003 
 
 
¶11.  (SBU) According to Xu, CIQ relies on importers to provide 
extensive data in advance of the arrival of the shipment.  When 
the shipment arrives in Shanghai, CIQ carries out an on-site 
inspection, ensuring the documents match the actual goods.  If 
required, they will take a sample for inspection and testing. 
Xu emphasized that lab tests and standards are based on 
international standards.  In particular, CIQ tests for 
microorganisms, pesticides, heavy metals, trace elements, 
chemical residues, parasites, pathogens and weeds.  Goods that 
qualify are released.  Those that do not meet standards are 
returned to their point of origin or sent for destruction. 
 
¶12.  (SBU) Likewise, CIQ ensures the quality of food exports. 
All exported food and raw material derived from animal and plant 
sources must come from farms and production plants that are 
inspected and approved by CIQ.  Xu said that CIQ relies on three 
methods of ensuring quality from approved producers:  self 
inspection and control, regular sanitary inspections by CIQ 
authorities and random sampling.   He added that as of last 
year, all goods that have been approved by CIQ must have a CIQ 
mark on its outer packaging.  In addition, all food export 
enterprises must indicate their name on every product's outer 
packaging.  This allows for traceability. 
 
Divergent Requirements Allows Loopholes 
--------------------------------------- 
 
¶13.  (SBU) Xu said that because U.S. authorities do not require 
the same information and certificates that the Chinese side 
requires, there are some unqualified Chinese goods that enter 
the United States.  He also noted that all exported goods are 
managed locally by the CIQ in the relevant jurisdiction.  For 
example, food produced in Jiangsu is subject to the oversight by 
the Jiangsu CIQ authorities.  However, if the food is exported 
through Shanghai, Shanghai CIQ also carries out inspection on a 
certain percentage.  Shanghai CIQ checks to see if the goods 
comply with the documents and they bear the CIQ mark.  Only 
after this inspection are clearance documents given so that 
Customs will release the goods.  Xu noted that CIQ officers 
judge the level of risk of each type of food according to their 
previous experience to target certain types of food for more 
careful scrutiny.  Pharmaceuticals and medical devices do not 
fall under the purview of CIQ, only a small number of 
traditional Chinese herbs. 
JARRETT