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CIRCULAR OF THE GENERAL OFFICE OF THE STATE COUNCIL ON THE TRANSMISSION OF THE RECOMMENDATIONS SUBMITTED BY THE STATE ECONOMIC COMMISSION, THE MINISTRY OF FOREIGN ECONOMIC RELATIONS AND TRADE, AND THE STATE BUREAU OF IMPORT AND EXPORT COMMODITIES INSPECTION CONCERNING THE STRENGTHENING OF QUALITY CONTROL

    The strengthening of quality control of export commodities is the key to
increasing economic returns as well as foreign exchange earnings. In recent
years, the quality of some of our country's export commodities has shown a
decline, which has not only caused economic losses and affected foreign
exchange earnings by exports, but also marred the reputation of our country.
All the localities and departments concerned shall give the amplest attention
to this state of affairs, take effective measures to remedy it quickly so as
to upgrade the quality of our export commodities.
RECOMMENDATIONS SUBMITTED BY THE STATE ECONOMIC COMMISSION, THE MINISTRY
OF FOREIGN ECONOMIC RELATIONS AND TRADE, AND THE STATE BUREAU OF IMPORT AND
EXPORT COMMODITIES INSPECTION CONCERNING THE STRENGTHENING OF QUALITY CONTROL
OF EXPORT COMMODITIES (Extracts)

    In recent years, the quality of some of our country's export commodities
has shown a decline, which has not only caused economic losses and had an
unfavourable impact on the foreign exchange earnings by exports, but also
marred the reputation of our country. In order to rapidly remedy this
situation and to strengthen quality control of our export commodities, we
hereby submit, on the basis of the investigations and studies of the aforesaid
situation and the opinions solicited from all localities and departments
concerned, the following recommendations:

    I  Checking up and Rectifying Factories to be Designated as Export
Commodities Manufacturers

    All the localities and departments concerned must carry out an all-round
checking-up on, and rectification of, all the enterprises that are
manufacturing export commodities and then designate from among them the most
outstanding ones as manufacturers of commodities for export. Those enterprises
found to be lacking the conditions for guaranteeing the quality of their
products shall not be permitted to manufacture commodities for export.

    The State Economic Commission, the Ministry of Foreign Economic Relations
and Trade, and the State Bureau of Import and Export Commodities Inspection
shall jointly be responsible for the checking-up and rectification in
conjunction with other competent organs concerned. The checking-up and
rectification shall be focused on those industries whose quality control over
export commodities is comparatively poor, whose number of factories designated
for producing and processing export commodities is too large, and whose
quality problems are numerous.

    II  Strengthening the Quality Control and Inspection Work in Enterprises
Producing Export Commodities

    (1) In production enterprises, the factory director (the manager) shall
take overall responsibility for quality of export commodities.

    (2) In factories specially engaged in the production of export commodities,
the production bases of export commodities, and the enterprises producing
import and export commodities, the post of chief quality controller may be set
up. The chief quality controller shall assist the factory director in taking
the overall responsibility for inspecting and controlling the quality of
products, for implementing the Regulations on the Responsibility for Quality
Control of Industrial Products, for organizing the formulation and
implementation of the rules for reward and penalty relating to the quality
of products, and for making the decision, on behalf of the factory director,
to stop the production and delivery out of the factory of sub-standard export
commodities.

    (3) In enterprises producing important export commodities, the system of
having a resident quality supervisor stationed in the enterprise and sent by
the State commodities inspection department (referred to, for short, as "the
resident supervisor system") shall be implemented on a trial basis. The
resident supervisor shall, in the name of the State, exercise supervision over
the quality and inspection of the production enterprise's export commodities,
and have the right to inspect, to spot check, or to re-inspect the finished
products, or the raw and processed materials, or spare parts and components,
used in manufacturing export commodities. In case where the resident supervisor
discovers that the export commodities are not up to the standard, he/she has
the right to stop the delivery out of the factory of the export commodities,
and may ask the foreign trade corporations not to purchase the said export
commodities. The production enterprise shall provide the resident supervisor
with working conditions, the data of quality, and relevant technical
documents for carrying out quality, inspection; and it shall also inspect,
spot check, or re-inspect its products, as required by the resident
supervisors .The resident supervisors shall be personnel of the State
commodities inspection departments, and their salaries, bonuses and welfare
benefits shall all be borne by the sending department so that no direct
economic connections shall exist between the resident supervisors and the
production enterprise.

    (4) All the production enterprises manufacturing export commodities shall
implement an all-round quaLity control, strengthen and perfect the quality
responsibility system, strengthen inspection work, and work out strict
technological processes and labour discipline. The factory director shall
appoint a person who has technical know-how, experience and strong sense of
responsibility, as head of the inspection department, and this appointment
shall be reported to the authorities in charge of the enterprise for the
record. No department or individual within the enterprise shall be permitted
to interfere with the work conducted by the inspection department, and its
independence in preforming its functions shall be guaranteed. It is imperative
to establish and perfect, as soon as possible, the quality guarantee
system in enterprises producing export commodities.

    III  Strengthening the Supervision and Inspection of the Quality of Export
Commodities

    All export commodities must undergo the process of inspection. Commodities
that are not up to the standard (including those whose packaging is not up to
the standard) shall not be permitted to leave the factory; the foreign trade
corporations shall not be permitted to purchase such commodities; and the
commodities inspection department shall not issue export licence and grant
clearance.

    The working contingent of the commodities inspection department shall be
reinforced gradually, and the means of inspection of export commodities be
perfected.

    The commodities inspection department shall, in conjunction with the
competent authorities concerned, speed up the work for issuing quality licenses
for important export commodities. With respect to those commodities to which
the system of quality licence for export commodities applies, the competent
authorities for foreign economic relations and trade shall not issue for them
export licences before they have obtained quality licenses for export
commodities.

    The competent authorities for foreign economic relations and trade shall
strengthen their supervision over and inspection of foreign trade corporations,
and urge them to strengthen the work of quality control, to improve
examination-and-acceptance system, and reinforce the working personnel for the
system, to strive to do a good job in selecting outstanding factories to
manufacture commodities for export, to purchase commodities from the factories
that produce quality produce and to adhere to the principle of "placing
quality first, and winning over the customers by offering them quality
products". The competent authorities for foreign economic relations and trade
shall have the right to disqualify those units which do not have the
qualifications for doing foreign trade business, and ask the administrative
department for industry and commerce to revoke their business licences. The
exportation of commodities through irregular channels or by using crooked
means by violation of the State provisions shall be strictly prohibited.

    IV  Taking the Improvement of the Quality of Export Commodities as the
Focus of the Work of Technical Advancement

    All the localities and departments shall, in accordance with the
requirements of the strategy of export and foreign trade, make adjustment in
the structure and the orientation of investment for technical advancement, and
link up the various measures adopted for technical transformation, the tackling
of difficult problems (in science and technology), the importation of
technology, testing and inspection, the expansion of production, and the
reduction in consumption of raw materials and energy, at the key production
enterprises, specialized factories, and production bases for the manufacture of export commodities by taking the improvement of the quality of products and
the increase in foreign exchange earnings as the focal point. Strenuous efforts
shall be devoted to the improvement of the warehousing and storage conditions
for export commodities, so as to reduce or eliminate the contamination of or
damages to export commodities.

    V  Clearly Defining the Responsibility for the Quality of Export
Commodities

    In order to guarantee the quality of export commodities, all units and
departments concerned must have both a clear-out definition of the job
responsibility and rules. If the poor quality of some export commodities has
resulted in economic losses or made a negative reflection on China's
reputation, it is imperative to check up on the responsibilities to be borne
by the production and processing enterprises, the foreign trade corporations,
the warehousing and storage units, the department for commodities inspection,
or other departments concerned. Cases of quality problem caused by dereliction
or neglect of one's duty shall be looked into, and the person in charge as
well as the leading personnel involved shall be held responsible and be dealt
with in all scriousness.

    VI  Further Improving the Packing of Export Commodities

    The China National Packing Import and Export Company shall, in cooperation
with the China National Packing Corporation, conduct further studies on, and
work out programs and measures for the improvement of the packing of export
commodities. Each year, efforts must be made to improve the packing of certain
categories of export commodities. At present, it is imperative to improve the
packing of foodstuffs, beverages, tobacco leaves, canned foods, hardware,
machinery, ceramics, textiles, garments, cotton, and dangerous articles. The
two companies shall coordinate the supply-and-demand relationship between
packing factories and packing material suppliers, perfect the packing
standards, and strengthen the work of quality control, inspection and
supervision.

    VII  Strengthening the Standardization of Export Commodities, and
Improving the Conditions for Conducting Measurement at Ports

    (1) The authorities of standardization  of commodities inspection, and
of foreign economic relations and trade shall, in cooperation with various
competent organs, speed up the formulation and revision of the standards  for
export commodities and inspection criteria.

    (2) The competent authorities of transportation shall, in cooperation with
the authorities of commodities inspection and metrological authorities, submit
a plan to improve metrological conditions at ports and incorporate it into
the program for technological transformation of the competent authorities of
transportation and the interested localities so as to improve basically the
metrological conditions at ports within 3 years.

    VIII  Strengthening the Administration of Trademarks of Export Commodities
and Patented Products

    With respect to the use of trademarks for export commodities of famous
brands, the authorities of foreign economic relations and trade and the
administrative departments for industry and commerce shall jointly conduct a
checking-up and rectification campaign to strengthen the administration and
protect export commodities of famous brands. Without the approval of the
competent authorities at a higher level or without the consent of the patentee,
no production enterprises and foreign trade corporations may produce patented
products for export and engage in export of such products.

    Cases occurring either at home or abroad of infringements or illegal acts
such as counterfeiting the trademarks of our export commodities, imitating the
patented commodities we export or forging our export commodities inspection
certificates shall be resolutely investigated and dealt with, and the
offenders shall even be prosecuted in time so as to safeguard the lawful
rights and interests of the enterprises as well as of the State.

    If no inappropriateness is found in the recommendations submitted above,
we request that they be approved and transmitted to all the localities and
departments for implementation.