China Food Import Labeling, Safety, and Regulation

Introduction: Chinese Food Imports and U.S. Safety Concerns

China has become a key source of food imports into the United States. Chinese food imports more than tripled in value between 2001 and 2008. A number of highly publicized food adulteration and contamination cases — in China's domestic food supply as well as in its exported goods to America — have directed public concern toward the safety of Chinese foods (Gale and Buzby, 2009). Partly inspired by these concerns, the U.S. Import Safety Interagency Working Group (IWG) published an import safety action plan, while the Food and Drug Administration (FDA) published its 2007 Food Protection Plan. In 2008, the FDA established its first foreign office in Beijing, China.

The FDA's refusals of food shipments from China reflect the mix of products imported: shellfish and fish, along with vegetable and fruit products, constitute the majority of refusals. Most food imports from China undergo some degree of processing. The FDA cites "filth," insufficient labeling, absence of appropriate manufacturer registrations, and unsafe additives as the most widespread issues — problems often introduced during product handling and processing. A second common issue is the possible presence of toxic veterinary drug residues in farm-raised shrimp and fish, which occurs at the farm level. Less frequently cited are harmful pathogens and pesticide residues in food shipments from China. Chinese authorities attempt to control exported food safety through farm and exporter certification (Gale and Buzby, 2009). However, certified exporters represent only a minor percentage of China's food industry. The majority of its roughly 200 million food companies and farms are, technically, not part of exported food supply chains. Monitoring the broad array of food products and potential hazards at different points in the supply chain remains a challenge for both U.S. and Chinese authorities. Food safety exchanges and consultations between the two countries are a key step toward improving the efficiency and effectiveness of supervision and enforcement of American food safety requirements for Chinese food shipments.

Notable Food Safety Incidents in China

Several news outlets — including the Australian Press, Xinhua, and the Associated Press — reported the deaths of 11 individuals and the illness of approximately 120 to 140 more from contaminated vinegar. The incident carried additional tension because the victims were Uighurs, an ethnic minority group residing in a small, far-western Xinjiang village. Their pursuit of political independence from Beijing had already resulted in riots in 2009, which were violently suppressed (McKenna, 2011). Nearly all of the village's roughly 150 residents had gathered for iftar, the breaking of the Ramadan fast.

That incident was the second vinegar-related scandal within the same month. A few weeks earlier, an official from the organization overseeing Shanxi province's vinegar production revealed that 95% of its popular "aged" vinegar was treated with industrial acid to shorten fermentation time and accelerate batch output. These examples are only among the most recent (McKenna, 2011). Earlier cases include reports of "phosphorescent" meat, exploding watermelons, contaminated buns, bleach-infused mushrooms, rice containing heavy metals, forty tons of bean sprouts laced with carcinogens and antibiotics, and heavily doped pork — against which athletes attending a major international sporting event in Shanghai were specifically warned.

China's Food Safety Regulatory Structure

No fewer than six Chinese government authorities have been assigned the task of enforcing the nation's food safety system. A Food Safety Committee oversees and coordinates these agencies' activities. On March 10, 2013, the Chinese State Council put forward a proposal to restructure certain commissions and ministries before the National People's Congress (NPC). The proposal was approved four days later. This restructuring significantly affects the food safety system, primarily by allocating more control to the State General Administration of Food and Drug (SGFDA) (Food Safety in China — From a Regulatory Perspective, Norton Rose Fulbright, 2013). What was considered, fewer than four years ago, a central element of the solution to China's food safety problems is once again undergoing reform. This latest reorganization may reflect Chinese lawmakers' ongoing search for an effective resolution — less a novel concept than a sign of a persistent regulatory power struggle. The resulting flux within the food safety system increases unpredictability for food companies required to comply with and implement the applicable rules, with severe sanctions hanging over those that fail to do so.

In China, the health ministry serves as the most critical food safety regulator. Under the Food Safety Law (FSL), this ministry is empowered to: (i) establish and announce standards; (ii) organize and implement food safety risk assessment and monitoring plans; (iii) disclose food safety information; and (iv) manage the nation's food safety crises. The ministry is reportedly set to receive additional authority under the next comprehensive governmental agency reform (Food Safety in China — From a Regulatory Perspective, Norton Rose Fulbright, 2013).

Responsibility for food safety in the restaurant and catering sector was assigned to the State FDA (SFDA) and its regional divisions. All individuals or companies engaged in food catering must obtain an SFDA Food Catering Services License. The SFDA is authorized to inspect food catering sites, close down substandard raw material or food product operations, suspend catering services, revoke licenses, and levy fines. In practice, however, this responsibility overlaps with that of the State Administration for Industry and Commerce (SAIC), which is authorized to inspect all types of everyday commercial activities, including food catering. Compared to the prominent role of the American FDA, the Chinese SFDA holds a more marginal position in China's overall food safety management structure.

In theory, restricting imports to suppliers registered under the Administration of Quality Supervision, Inspection and Quarantine (AQSIQ) system can improve food safety. In practice, significant resources are required to continuously monitor the large number of production sites and firms and to ensure that current information is maintained. A journalistic review of Shaanxi Province's export registration found that raw material source inspections for some exporters failed to keep pace with facility upgrades and expanded production volumes. In implementation, AQSIQ and the FDA have worked to advance their partnership through risk- and science-based safety frameworks, participated in discussions on laboratory testing standards, and begun collaborating through aquatic ingredient and product working groups. In November 2008, the FDA established its first foreign office in China.

Conclusion

The swift growth of Chinese food imports and their surprising resilience despite extensive negative publicity reflects strong underlying demand for the nation's products. Finding effective ways to ensure the safe flow of products from China will benefit Chinese suppliers and their American buyers alike. Corporate leaders and regulatory authorities face difficult challenges in developing innovative solutions for facilitating trade between nations with differing legal frameworks and agricultural systems (Gale and Buzby, 2009). Private-sector decision-makers may need to take costly steps, including forging closer relationships with Chinese suppliers, conducting more frequent audits, arranging independent product testing, and pursuing third-party certification. The difficulty of conducting reliable corporate audits within China is underscored by accounts of Chinese "shadow factories," sophisticated record falsification strategies, and other techniques used to evade overseas clients' inspections.

The 2015 FSL revisions represent one of the most consequential developments in China's food safety history. Whether anticipated or unexpected, these changes require effective implementation — supported by regulatory cooperation between U.S. and Chinese authorities and meaningful engagement from industry stakeholders. China's ability to build voluntary compliance and earn stakeholder trust, especially on issues such as baby formula safety, will determine how meaningful these legislative reforms ultimately prove to be.

References

Balzano, J. (2015). Revised food safety law in China signals many changes and some surprises. Forbes. Retrieved June 25, 2016, from http://www.forbes.com/sites/johnbalzano/2015/05/03/revised-food-safety-law-in-china-signals-many-changes-and-some-surprises/

Fu-Tomlinson, Y., & Wang, V. (2015). Food labeling for companies manufacturing or distributing food in China. Food Safety Magazine. Retrieved June 24, 2016, from

Gale, F., & Buzby, J. (2009). Imports from China and food safety issues (Economic Information Bulletin No. 52). USDA Economic Research Service. Retrieved June 24, 2016, from

McKenna, M. (2011). Food safety in China, and the risk to the U.S. Wired. Retrieved June 24, 2016, from http://www.wired.com/2011/08/china-food-risk/

Norton Rose Fulbright. (2013). Food safety in China — From a regulatory perspective. Retrieved June 24, 2016, from http://www.nortonrosefulbright.com/knowledge/publications/76080/food-safety-in-china-from-a-regulatory-perspective