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China, seeking to assure the world its products are safe, said on Wednesday a tainted milk scandal had been brought under control and recently tested liquid milk samples showed no traces of a toxic chemical. "There is no problem," Xiang Yuzhang, the national quality watchdog's chief inspection official, told reporters in Beijing.
-- China says recent liquid milk samples not tainted
-- NZ group Fonterra slashes investment in Sanlu
-- US checking for imports of Chinese milk products
"It has been brought under control, more or less. There are no more problems in the market. As far as I know, there will be no more bad news." China's quality control agency said on its website (www.aqsiq.gov.cn) that 235 samples of carton milk and drinking yoghurt produced since September 14 and sold across the country had shown no signs of the toxic chemical melamine.
But China could face an uphill struggle to convince its own people and those abroad that it has the situation in hand. The government has said the Sanlu Group, the company at the centre of the scandal, knew for months there was a problem with its milk powder before reporting it.
China has a poor record of glossing over or ignoring bad news, initially covering up the Sars epidemic in 2003. Australia on Wednesday issued fresh warnings for China and nearby nations in the wake of the scandal, advising its citizens overseas to avoid all Chinese-made milk products, unless companies have confirmed their goods are free from contamination.
In Shanghai, the visiting acting chairman of the US Consumer Product Safety Commission, Nancy Nord, said the government was checking imports of foodstuffs that might contain Chinese milk products. "One can always do more. We've seen reasonable progress in China, but there's a long way to go," she said.
Beijing is battling public alarm and international dismay after close to 13,000 Chinese children crowded hospitals, ill from infant milk formula tainted with melamine, a cheap industrial chemical that can be used to cheat quality checks. Nitrogen-rich melamine can be added to substandard or watered-down milk to fool quality checks, which often use nitrogen levels to measure the amount of protein in milk. The chemical is used in pesticides and in making plastics.
So far, four deaths have been blamed on kidney stones and agonising complications caused by the toxic milk. China's latest food safety crisis has triggered arrests, official sackings and bans and tightened inspections by trade partners. Global consumer goods giant Unilever said it had removed its Lipton green milk tea product from store shelves in Taiwan as it might have used tainted milk from Chinese companies.
Taiwan's health department also ordered stores to remove any product containing China-made vegetable protein, cream or dairy products by the end of Wednesday. In New York, Chinese Premier Wen Jiabao said his government would use the crisis as a chance to overhaul safety controls.
China would "strengthen institutional development, and take seriously supervision and inspections in every link of production, truly ensuring the interests of consumers", Xinhua news agency quoted Wen as saying. This was not the first time that a Chinese leader has sought to reassure a foreign audience that the country was cracking down on unsafe products.
Last year, China launched a quality drive after a surge of scares over toys, toothpaste, pharmaceutical ingredients and pet food ingredients. The latter were also laced with melamine. At that time, Chinese officials often said foreign media and critics had exaggerated the country's problems.
But now they are focused on quelling domestic alarm and anger, with 54,000 Chinese children affected and more than 100 in serious condition, revelations of a government-blessed cover-up, and consumers wondering just what milk products might be safe.
China has said it found melamine in nearly 10 percent of milk and drinking yoghurt in earlier samples from three major dairy companies. But the General Administration of Quality Supervision, Inspection and Quarantine said the 235 samples taken from them and other producers for its latest check were not tainted.
Retailers would "ensure the market is fully supplied with good quality and safe dairy products", it said. New Zealand dairy export giant Fonterra Co-operative Group slashed the value of its big investment in Sanlu Group by nearly 70 percent on Wednesday.
Many of the infant poisonings are linked to Sanlu's popular milk powder. The company has ceased production. The official Xinhua news agency reported that Sanlu knew for many months that its infant milk powder was tainted. Fonterra repeated that it first knew of the contamination in early August, and took what it regarded as the best action by working with local Chinese authorities on a product recall.
"If something did exist prior to that we're shocked that it did and we obviously feel that if people were aware of it, it should have gone to the board," chief executive Andrew Ferrier told a media briefing in Auckland. Fonterra cut the value of its 43 percent stake in Sanlu to about NZ$62 million ($42 million). It said the writedown reflected the damage done to Sanlu and the likelihood it would not recover.

Copyright Reuters, 2008

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