VZCZCXRO8482
RR RUEHCN RUEHVC
DE RUEHGH #0318/01 2251015
ZNR UUUUU ZZH
R 121015Z AUG 08
FM AMCONSUL SHANGHAI
TO RUEHC/SECSTATE WASHDC 7048
INFO RUEHOO/CHINA POSTS COLLECTIVE
RUEHKO/AMEMBASSY TOKYO 0348
RUEHGV/USMISSION GENEVA 0034
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 7621

UNCLAS SECTION 01 OF 03 SHANGHAI 000318 
 
SENSITIVE 
SIPDIS 
 
STATE FOR EAP/CM AND EB 
STATE PASS USTR FOR STRATFORD/WINTER/KATZ 
DOC FOR ITA - DAS KASOFF, CMCQUEEN, ESZYMANSKI 
TREASURY FOR OASIA - DOHNER/HAARSAGER/CUSHMAN 
NSC FOR LOI, SHRIER 
USDA FAS FOR ITP/SHEIKH 
STATE PASS FOOD AND DRUG ADMINISTRATION FOR HICKEY 
 
E.O. 12958: N/A 
TAGS: ETRD TBIO PGOV ECON BEXP EAGR CH
SUBJECT: JIANGSU AND NINGBO CIQS URGE GREATER COOPERATION ON FOOD AND 
PRODUCT SAFETY 
 
SHANGHAI 00000318  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 with the Jiangsu 
Provincial Entry-Exit Quality Inspection and Quarantine (CIQ) 
Office in Nanjing on July 31 and the Ningbo City CIQ Office on 
August 4 to discuss a wide range of import and export issues. 
Both offices welcomed greater cooperation with the Consulate on 
import and export issues.  Jiangsu CIQ acknowledged the 
importance of food and product safety and urged that the United 
States only accept Chinese products with the official seal from 
the General Administration of Quality Supervision, Inspection 
and Quarantine (AQSIQ).  Both CIQ offices noted that the biggest 
problems with U.S. agricultural shipments into China are that 
many shipments are mislabeled as a higher grade product and/or 
under the declared weight.  While Ningbo CIQ reported fewer 
problems with food products, Jiangsu CIQ complained about the 
usage of ractopamine in U.S. pork products.  Both CIQ offices 
complained about the different standards used in the United 
States and urged that the USG try to simplify and unify 
standards.  Ningbo CIQ reported that China is trying to 
streamline its inspection process by creating a list of items 
that require special attention while allowing other items to 
pass more quickly.  End Summary. 
 
¶2.  (U) During farewell visits to Nanjing and Ningbo on July 
30-31 and August 4 respectively, the CG met with the Jiangsu CIQ 
and Ningbo CIQ.  On July 31, Jiangsu CIQ Deputy Director General 
(DDG) Lu Yonggui provided a detailed briefing on Jiangsu CIQ's 
operations.  Lu was joined by eight Jiangsu CIQ senior 
department heads.  The department heads were also well prepared 
for the meeting and spoke in detail when called upon by Lu. 
After the meeting, Deputy DG Lu gave a tour of Jiangsu CIQ 
testing facilities.  Lu said that Jiangsu CIQ tries to replicate 
conditions in U.S. labs, even going so far as making sure that 
the lighting is the same.  A majority of the Jiangsu CIQ 
equipment is from the United States or Europe.  Ningbo CIQ 
Director General Shan Wei and Deputy Director General (DDG) Chen 
Mengyu were also very detailed in their later meeting with the 
CG, which followed a similar format. 
 
Food and Product Safety 
----------------------- 
 
¶3.  (SBU) Jiangsu CIQ DDG Lu stressed the importance the Jiangsu 
CIQ places on food safety, noting that food and product safety 
also affects Chinese consumers.  He noted that the U.S. FDA had 
sent inspectors to Hubei and Guangdong to carry out 
investigations.  He is interested in knowing more about the 
results of these investigations.  In general, DDG Lu opined, FDA 
reports on food and product safety problems tend to be too 
simplistic.  It would help Chinese authorities, as they carry 
out their own investigations, if the U.S. FDA reports had more 
details.  This would also help Chinese authorities to better 
understand U.S. concerns and resolve issues when they arise. 
According to Lu, many of the Chinese products that were found to 
be unsafe in the United States did not have the official General 
Administration of Quality Supervision, Inspection and Quarantine 
(AQSIQ) stamp and had not been reviewed by AQSIQ authorities. 
He urged that the United States only accept products that have 
been certified by AQSIQ and not allow any products into the 
country without an AQSIQ stamp.  He also noted that all U.S. 
food products should have in place official Chinese labels 
before arriving in China. 
 
Agriculture Imports from USA Still a Challenge 
------------------------------------------ 
 
¶4.  (SBU) Both Jiangsu CIQ and Ningbo CIQ were pleased with the 
general trade relationship, but each noted similar problems with 
agricultural imports from the United States.  Ningbo CIQ DDG 
Chen Mengyu complained that some wood packing materials from the 
United States did not bear the official IPPC stamp (an 
international standard for wood packaging) and were not up to 
standards.  In 2007, of the total 8,741 shipments of wood 
packaging, 492 did not bear the IPPC stamp and an additional 591 
had other quality problems. 
 
SHANGHAI 00000318  002.2 OF 003 
 
 
 
¶5.  (SBU) According to Jiangsu CIQ DDG Lu, 43 percent of 
Jiangsu's cotton comes from the United States and the province 
is the second largest importer of U.S. cotton in China.  In 2007 
there were a total of 67 shipments, of which 27 cases were not 
up to standards.  In 2008 to date, out of 32 cotton shipments, 9 
were below grade.   Additionally, 80 percent of all cotton 
shipments in 2007 were under the declared weight.  Jiangsu DDG 
Lu also complained that some shipments of U.S. cotton were 
mislabeled and given a higher grade.  Every year Jiangsu CIQ 
procures cotton samples from the United States and uses these 
samples to compare to the shipments in making a determination of 
the cotton's grade.  In addition, some samples are taken to 
another testing area to measure the fiber length and quality. 
Like Ningbo CIQ, Jiangsu CIQ also complained that shipments are 
sometimes underweight. 
 
¶6.  (SBU) Other problems included processed timber, where 
quality issues have been increasing generally.  In 2007, there 
were 544 shipments, worth USD 9.4 million.  Of this total, 31 
shipments, worth USD 820,000, did not meet standards.  Soybean 
imports have also been problematic; many shipments contained 
substantial amounts of blue and red marked beans (those used for 
seed rather than human consumption).  CIQ also detected 37 
different kinds of harmful insects in the shipments.  In 2007, 
there were 18 shipments of U.S. soybeans worth USD 140 million 
to Ningbo.  Of these, 5 shipments did not qualify. Jiangsu CIQ 
also had the same complaints about U.S. soybeans.  While the 
quality of U.S. soybeans is generally good, there are some 
shipments that come in underweight and/or also contain bad 
quality beans. 
 
Animal Products Fare a Bit Better in Ningbo than in Jiangsu 
--------------------------------------------- --------------- 
 
¶7.  (SBU) Chen emphasized that the majority of problems with 
U.S. agriculture products involved goods of plant origin rather 
than animal origin.  In 2007, Ningbo received 19 shipments of 
seafood, totaling over 376 tons.  There were a few problems with 
pathogen residues, but in general the seafood products were 
within standards.  Ningbo also received shipments of turkey 
feathers and cow hides from the United States, which did not 
pose any problems. 
 
¶8.  (SBU) Jiangsu CIQ DDG Lu said most of the problems in U.S. 
agriculture came from food products, in particular frozen meat. 
Only 88 percent of U.S. frozen meat shipments pass inspection. 
The main problem is that U.S. pork producers use ractopamine in 
their pork products, which is not allowed in China.  Last year 
15 U.S. pork shipments were found to have ractopamine traces. 
 
 
Cotton: The Fiber of a Strong Relationship 
------------------------------------------ 
 
¶9.  (U) Given the volume of cotton imports, both Jiangsu and 
Ningbo are interested in developing better communication with 
the U.S. cotton industry.  During the June 2008 visit of the 
U.S. Cotton Council, Ningbo CIQ demonstrated China's cotton 
testing procedures and standards so the Council would be better 
able to advise U.S. producers.  Ningbo DDG Chen noted one of the 
most common problems with U.S. cotton is the strength of the 
fibers and used some of the Cotton Council's samples to 
demonstrate the problem.  The U.S. Cotton Council discussed the 
"Green Card Standards" used in the United States to measure 
quality.  Chen said China is generally not aware of these 
standards and urged the Cotton Council to introduce the U.S. 
Green Card Standards to AQSIQ authorities in Beijing. 
 
Streamlining the System 
----------------------- 
 
¶10.  (U) According to Chen, CIQ is working on methods to 
streamline the import inspection process.  During a meeting with 
other CIQ offices in Shanghai, plans were announced to create a 
list of approximately 1,900 tariff-line items required to 
receive "special inspection."  Items not on the list would 
 
SHANGHAI 00000318  003.2 OF 003 
 
 
receive a faster clearance.  Ningbo intends to follow the new 
guidance, which will increase efficiency in the clearance 
process.  Chen also noted that there was also discussion of 
"black-listing" companies that willfully violate CIQ procedures 
and rules.  Some suggested that companies be given only one 
chance before being blacklisted, but Chen felt companies should 
be given at least three chances. 
 
"China's Exports Improving, but U.S. Standards Confusing' 
--------------------------------------------- ------------ 
 
¶11.  (U) DG Shan emphasized that China's exports to the U.S. 
were improving in quality but many Chinese exporters are baffled 
by the array of U.S. quality standards, particularly among 
different states.  State standards sometimes exceed Federal 
Government standards.  He also said some standards are raised so 
quickly, it is impossible for Chinese companies to keep pace. 
As an example, he cited Chinese air conditioners, claiming that 
currently no Chinese companies can meet the U.S. standards 
because they have changed so rapidly.  (Note: Haier air 
conditioners are sold generally throughout the United States. 
End Note.)  He urged the United States to take a more measured 
approach to changes in quality standards so Chinese companies 
could adjust "step-by-step."  Jiangsu DDG Lu also urged more 
uniformity in U.S. standards.  Jiangsu exports a large amount of 
seafood to the United States.  Seafood standards vary widely 
among the different states in America and this was causing a 
great deal of confusion among Jiangsu food exporters. 
 
Cooperation From Both Sides 
--------------------------- 
 
¶11.  (U) Ningbo DG Shan welcomed closer cooperation with the 
U.S. Consulate and U.S. business.  He referred to the 2005 
Memorandum of Understanding (MOU) between AQSIQ and the Consumer 
Product Safety Commission, urging the U.S. side to cooperate 
more closely on providing guidance on U.S. regulatory changes 
that affect exporters from China.  He noted his dissatisfaction 
with a recent case in which the USG complained about a Chinese 
export but was unwilling to reveal the name of the Chinese 
company for CIQ to follow up.  The USG agency involved said it 
could not release the name of the company because of privacy 
issues.  Shan queried under such circumstances how could CIQ be 
expected to do its job.  The CG emphasized that U.S. exporters 
to China would also welcome additional guidance as China's 
regulations governing food and product safety are amended.  The 
CG also noted that USFDA will soon establish an office in 
Shanghai and intends to cooperate closely with CIQ.  Shan 
welcomed the establishment of an FDA office in Shanghai and 
promised Ningbo CIQ's cooperation. 
 
¶12.  (U) In his meeting with Jiangsu CIQ, the CG also pushed for 
greater cooperation between the Consulate and Jiangsu CIQ.  He 
urged that the Jiangsu CIQ inform the Consulate before it 
destroys or returns U.S. shipments.  He noted that the Consulate 
wants to organize a training session on U.S. standards and 
importation for the East China area and hopes that the Jiangsu 
CIQ would participate. 
JARRETT