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CHINA: China Takes Aim at U.S. on Quality Control Amid Criticism Over Recalls

by Nicholas ZamiskaWall Street Journal
October 10th, 2007

The Chinese government, scrambling to counter a storm of criticism over the safety of the nation's exports, is now taking aim at products sent to China from some of America's largest companies.

In an interview with The Wall Street Journal, Li Changjiang -- China's most senior quality-control official and head of the government's 30,000-person inspection service -- presented a list of defects and dangers he said have turned up in products shipped by U.S. companies. These include turbines from General Electric Co., ultrasound machines from a U.S. unit of Philips Electronics NV, of the Netherlands, and farm machinery from Deere & Co. Mr. Li pointed to problems ranging from mislabeled pacemakers to engine problems to pesticide-laden apples grown in Washington state to defective homing pigeons, infected with disease. In some cases, the companies involved had previously acknowledged and responded to complaints from China about the items.

From January to July, for instance, the U.S. exported 267,300 shipments of goods valued at $18.7 billion to China, said Mr. Li, who is head of the General Administration for Quality, Supervision, Inspection and Quarantine, or Aqsiq. Of those shipments, Chinese quality-control officials found problems of one kind or another with 4,845 shipments, or 1.8% of the total, he said.

In Washington, U.S. officials said they were unaware of the examples cited by the Chinese government, but defended the safety of U.S. products. Sean Spicer, a spokesman for U.S. Trade Representative Susan Schwab, said: "While China's recent efforts to improve food and product safety represent a constructive way forward, attacking the U.S. -- which has one of the best systems in the world for protecting consumer safety -- is counter productive."

Recently, China scored a public-relations coup when a senior executive from the U.S. toy giant Mattel Inc. apologized personally to Mr. Li for a recall of millions of Chinese-made toys, saying that the company's own "design flaw" was responsible for its biggest recall, involving around 18 million play sets containing potentially dangerous magnets. The state-run China Daily newspaper ran an editorial Sept. 24 with the headline, "An apology at long last."

At his agency's headquarters in Beijing, Mr. Li provided the Journal with a list of about a dozen American exports that have been seized by Chinese officials for quality problems in the past year. "I think, fairly speaking, both the Chinese export companies and American importers all shoulder responsibilities," he said.

Earlier this year, for example, Chinese quality-control inspectors discovered a broken crankshaft on an imported cotton-picking machine made by Deere, according to Mr. Li. An inspection by Aqsiq later attributed the problem, in model No. 9970, to a design defect. Deere ultimately agreed to replace the parts on the $17.9 million shipment of 100 massive, green-and-yellow machines.

Ken Golden, a spokesman for Deere, of Moline, Ill., said the company recognized a "quality issue" in the engine model for the No. 9970 cotton pickers shipped to China. Deere was told that only one machine had actually failed, he said. The company replaced the part on all 100 cotton pickers "even though the probability of engine failure was low," Mr. Golden said. "At no time could the defect have endangered the users of the equipment," he added.

Mr. Li's list also cited shipments of more than 430 Hummer trucks, models H2 and H3, manufactured by General Motors Corp. of Detroit -- and imported into China by unknown third-party suppliers -- that Mr. Li's office says didn't meet Chinese safety requirements. "The shape of the front, large headlights don't have clear-cut boundaries between bright and dark" so that "when two cars are driving toward each other, it could have a negative influence on the driver's vision, to cause dazzling," according to Aqsiq. The government also cited problems with smaller amber-colored lights on the vehicles and markings on the speedometer that didn't meet Chinese standards. "These Hummers were not manufactured according to Chinese standards, so there are serious hidden dangers to use these automobiles on Chinese roads," said in a written statement provided by Aqsiq.

GM doesn't import or sell Hummer trucks in China, according to Jason Laird, spokesman in Shanghai for General Motors. Third-party car dealers routinely ship cars around the world. "Any vehicle imported by General Motors into China or any other country would meet the certification and licensing requirements," says Mr. Laird. "We certainly don't support third parties importing the vehicles because the sorts of issues the government is raising can and do occur."

Mr. Li's list also included a May shipment of pacemakers manufactured by St. Jude Medical Inc., a medical-supply company based in St. Paul, Minn. The Chinese government said tests showed "hidden dangers" in the pacemakers because voltage settings on the box didn't match the voltage settings programmed into the devices.

Kathleen Janasz, a spokeswoman for St. Jude Medical, said that five pacemakers out of a total of 272 units shipped in April "had a label that did not accurately describe the pacemakers' voltage settings." In these cases, the box indicated a voltage of 2.5, while the pacemakers were programmed with a voltage of 3.5. She added that both the voltage settings indicated on the box and those on the devices are safe for patients.

Douglas P. Zipes, a professor of cardiology at Indiana University's School of Medicine and former president of the American College of Cardiology, says that the mislabeling, as described by St. Jude, didn't seem to pose a major threat to patients, because even if a physician had implanted the device without double-checking its voltage, the pacemaker would have given a more powerful signal to the heart ensuring its effectiveness.

The five mislabeled pacemakers were returned to St. Jude Medical. Ms. Janasz said that the labeling process has since been "strengthened to help prevent a similar occurrence going forward."

In February 2006, the Chinese government said inspection officials found a batch of ultrasound scanners manufactured by a U.S. unit of Philips in which the power switch had "the danger of electronic shock." The shipment was blocked from entering China, according to the government. In December, a hospital in Fujian province imported the same product and found software problems. It returned the ultrasound scanners to the U.S. this past May.

Ian Race, a spokesman for the U.S. unit of Philips, said his company has no record of the February 2006 incident. Mr. Race said there was one ultrasound unit that had been replaced at the Fujian Provincial Hospital because of a faulty cable that caused an error screen to occasionally appear on the machine's display. "This is a minor problem and in no way impacts safety for users or patients," Mr. Race said, adding that the company replaced the machine.

In 2006, a Shanghai hospital experienced "frequent problems" with an X-ray unit made by General Electric. "Just within one year since the installation of this equipment," the document provided by Mr. Li reads, "there were 22 post-sale repairs, including 10 on-the-spot emergency repairs."

GE spokesman Peter O'Toole said there are 459 of the advanced X-ray machines installed world-wide, 81 of them in China. Mr. O'Toole said the machine has been "running as expected" since March and is scanning as many as 200 patients a day.

Separately, the Chinese government pointed to problems with gas turbines manufactured by GE and sold to a Chinese power company. According to the document provided by Mr. Li, the turbines had broken down several times, most recently in May, causing "heavy economic losses" for the Chinese firms, which included Baochang Power Co. in Guangdong province. Baochang was unavailable for comment.

Jim Healy, a spokesman for GE Energy, said GE worked closely with the Baochang power plant to get the plants back on-line quickly after the turbines shut down in May. There were two 9E turbines involved in the shutdowns, he said. GE has 1,180 of the E-Class units installed around the world operating at over 99% reliability, Mr. Healy said. The outages didn't present a safety risk to the operators, he said.

China power companies have been big purchasers of GE turbines in recent years as the country has ramped up its electricity supply. GE Chairman and Chief Executive Jeffrey Immelt was in China for the signing of an agreement to sell two 9E gas turbines to Wuhan Iron and Steel Company, Ltd. of Wuhan, China.

The eclectic list also cited a shipment of 41 American-bred homing pigeons infected with a dangerous viral disease as well as a shipment of 1,029 boxes of apples from Washington state that were found to have unsafe levels of methyl parathion, a restricted pesticide in both China and the US. The Washington Apple Commission says it isn't aware of the shipment, adding that methyl parathion hasn't been used in the U.S. for at least five years.





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