1. Sociedade Portuguesa de Inovação Beijing, December 2004 Key Policies, Practices and Standards for Chinese Agro-food Processing of Fruit and Vegetables

2. Responding to S&T co-operation with China – The Development of a Cross-Border Agro-Food Processing S&T Platform December 2004 Agenda  1. Introduction of the Chinese Fruit and Vegetable Processing Sector.  2. Administration System of Chinese Agro-Food Processing of Fruit and Vegetables.  3. Legislative Regulations of Chinese Agro-Food Processing of Fruit and Vegetables.  4. Chinese Agro-food Processing of Fruit and Vegetables: Regulating Standards.  5. Analysis of China’s Key Policies on Agro-Food Processing of Fruit and Vegetables.

3. Responding to S&T co-operation with China – The Development of a Cross-Border Agro-Food Processing S&T Platform December 2004 The Development History 1. Introduction of the Chinese Fruit and Vegetable Processing Sector  From 1949 to 1979, fruit juice products were very limited in the Chinese market.  After 1990, the industry achieved rapid development. In 2003, the output of fruit was more than 70 million tons. 450 million tons of vegetable were produced. The output of the fruit and vegetable juice reached 3.1 million tons.  In the 1980s, the reform and open policy gave farmers the freedom of choosing the crops and plants they wanted to cultivate. In 1989, the output of fruit juice reached 100 thousand tons.

4. Responding to S&T co-operation with China – The Development of a Cross-Border Agro-Food Processing S&T Platform December 2004 China’s Vegetable Planting Area and Output: 1996-2003 The Development History (cont.) 1. Introduction of the Chinese Fruit and Vegetable Processing Sector

5. Responding to S&T co-operation with China – The Development of a Cross-Border Agro-Food Processing S&T Platform December 2004 China’s Fruit Output: 1990-2003 The Development History (cont.) 1. Introduction of the Chinese Fruit and Vegetable Processing Sector

6. Responding to S&T co-operation with China – The Development of a Cross-Border Agro-Food Processing S&T Platform December 2004  More than 60% of manufacturers’ equipments are integrated with the internationally prevalent technology of the 1990s, e.g. enzyme application, ultra filtration, activated carbon absorption, recovery of natural fruit aromas, etc..  Many process companies own their own material orchards, encouraged by government financial aid and other measures. The Current Situation  With the accession of China into WTO, the issue of pesticide and chemicals residues gets more attention from processors and buyers outside China.  Most of the Chinese fruit and vegetable manufacturers started their business in the 1990s. 1. Introduction of the Chinese Fruit and Vegetable Processing Sector

7. Responding to S&T co-operation with China – The Development of a Cross-Border Agro-Food Processing S&T Platform December 2004 The Future Development and the Challenges  China is one of the biggest potential fruit and vegetable juice markets in the world. Annual Consumption (Kg) Countries 7kgWorld Average 19kgSingapore 16kgJapan 46kgGermany 45kgU.S.A 1kgChina Comparison of annual per capita consumption of fruit and vegetable juice China: Low annual per capita consumption 1. Introduction of the Chinese Fruit and Vegetable Processing Sector

8. Responding to S&T co-operation with China – The Development of a Cross-Border Agro-Food Processing S&T Platform December 2004 The Future Development and the Challenges (cont.)  Challenges on the on-going development of the industry sector  No authorative quality inspection standard of fruit and vegetable juice in China.  Chinese juice producers need to strenghten their own technical capabilities.  Still a lack of high quality fruit and vegetables. 1. Introduction of the Chinese Fruit and Vegetable Processing Sector

9. Responding to S&T co-operation with China – The Development of a Cross-Border Agro-Food Processing S&T Platform December 2004 2. Administration System of Chinese Agro-Food Processing of Fruit and Vegetables China’s Administration System  State Food and Drug Administration Takes charge of the general administrative responsibility of food safety issues, i.e. drafting the regulations and laws related to food, supervising the publication of food safety information and other relevant activities, etc..  Ministry of Health In charge of the legislation related to the food hygiene standards. Takes the responsibility of drafting, editing and amending the national food hygiene standards.  Ministry of Agriculture Holds the responsibility of implementing the quality supervision of Agro-food and Green Food.

10. Responding to S&T co-operation with China – The Development of a Cross-Border Agro-Food Processing S&T Platform December 2004  General Administration of Quality Supervision, Inspection & Quarantine (AQSIQ) In charge of all the affairs related to product quality in China: Chinese food market access regulation, food and cosmetics hygiene regulation, etc.  State Administration for Industry and Commerce Responsible for the supervision of the Agro-food product in the sales period and protection of the consumers’ rights against the fake and low quality food products. 2. Administration System of Chinese Agro-Food Processing of Fruit and Vegetables China’s Administration System (cont.)

11. Responding to S&T co-operation with China – The Development of a Cross-Border Agro-Food Processing S&T Platform December 2004 3. Legislative Regulations of Chinese Agro-Food Processing of Fruit and Vegetables China’s legislative regulation framework: key laws  Product Quality Law of the People’s Republic of China ( P.R.C )  Food Hygiene Law of P.R.C  Trademark Law of P.R.C  Law of P.R.C on Import and Export Commodity Inspection  Law of P.R.C on the Protection of Consumers' Rights and Interests  Law of P.R.C on the Entry and Exit Animal and Plant Quarantine  Law of Sanitary and Phytosanitary of Import and Export propagation

12. Responding to S&T co-operation with China – The Development of a Cross-Border Agro-Food Processing S&T Platform December 2004 Food Hygiene Law Principles (as an example) 3. Legislative Regulations of Chinese Agro-Food Processing of Fruit and Vegetables Most of the above laws except Food Hygiene Law do not only regulate the food issues, also cover the broad range of the other products. We take Food Hygiene Law as an example to examine the underlying legislative principles of these laws.  Principle of supervision by government The government establishes a system of food hygiene supervision.  Principle of thorough supervision Any person and organizations engaged in food production or marketing within the territory of P.R.C must obey this Law.  Principle of supervision by society The government encourages and protects the social supervision on food hygiene exercised by public organizations and individuals.

13. Responding to S&T co-operation with China – The Development of a Cross-Border Agro-Food Processing S&T Platform December 2004 Food Hygiene Law Requirements 3. Legislative Regulations of Chinese Agro-Food Processing of Fruit and Vegetables 1. The qualified Food should be non-toxic and harmless, conform to proper nutritive requirements and have appropriate sensory properties such as colour, fragrance and flavour; 2. Special requirements for the infants and the pre-school children; 3. Food must not contain any medicinal substances, with the exception of those materials that traditionally serve as food and medicine and are used as raw materials, condiments or nutrition; 4. Hygiene requirements for food additives; 5. Requirements for containers, packaging and equipment of food.

14. Responding to S&T co-operation with China – The Development of a Cross-Border Agro-Food Processing S&T Platform December 2004 General Introduction of Chinese Standards  Chinese standards on food can be divided into four levels: national standards, industrial standards, local standards and enterprises standards;  They can also be classified as: compulsory standards, recommendation standards and technical instructive files.  A third method of categorization is dividing them as product quality standards, production standards, inspection standards, etc..  The food product quality standards in China normally include the following content such as in Quality Standard of the Fruit Juice (NY/T 434-2000):  Range  Cited Standard  Requirement oSensory oPhysical and Chemical oHygiene  Testing Methods  Testing Rule  Sign and Label  Package, Storage and Transport 4. Chinese Agro-food Processing of Fruit and Vegetables: Regulating Standards

15. Responding to S&T co-operation with China – The Development of a Cross-Border Agro-Food Processing S&T Platform December 2004 4. Chinese Agro-food Processing of Fruit and Vegetables: Regulating Standards  Standards are implemented effectively by large and medium enterprises, foreign enterprises and joint ventures.  A lot of small and medium enterprises are not able to implement the national standards due to their underperforming technical capabilities and shabby equipments.  The frequency of food safety accidents in China reflects the poor implementation of the standards by some SMEs in this sector. Execution of Standards

16. Responding to S&T co-operation with China – The Development of a Cross-Border Agro-Food Processing S&T Platform December 2004  The Green Food certification system is regulated by Ministry of Agriculture. The “Green Food” logo (see right) can be printed in the package of the food certificated as “Green Food”. Chinese Certification System of Greed Food  The Green food standard system includes two classes of standards: Class A and Class AA.  For Class A Green Food, it is allowed to use the limited chemosynthetic fertilizer and pesticide during the production of the food.  But for Class AA Green Food, the use of chemosynthetic fertilizer, pesticide, animal medicine, feed additive, food additive and other substances harmful for the environment and the human health is forbidden. 4. Chinese Agro-food Processing of Fruit and Vegetables: Regulating Standards

17. Responding to S&T co-operation with China – The Development of a Cross-Border Agro-Food Processing S&T Platform December 2004  The Organic Food system is regulated by the State Environment Protection Administration. In 1995, it established the “Rules of Organic Food Labelling” and the “Technical Code of Organic Food Production and Processing”. Chinese Certification System of Organic Food and Non-environmental Pollution Food  The Non-environmental Pollution Food is certified and regulated by the Ministry of Agriculture. According to the Administration rule of Non-environmental Pollution Agro-food (April 29th, 2002), the certification can be classified into environment certification and product certification. 4. Chinese Agro-food Processing of Fruit and Vegetables: Regulating Standards

18. Responding to S&T co-operation with China – The Development of a Cross-Border Agro-Food Processing S&T Platform December 2004 Comparison of Chinese Standards of Green Food, Organic Food and Non-Environmental Pollution Agro-Food Utilization of the chemosynthetic fertilizers and pesticides Production Environment (GB18407.1 ～ 4-2001) Organic foodNot allowed According to production standard of organic agriculture The transition period is necessary in terms of changing the common production to the organic production. Green food Class AA Not allowed Organic producing standard Environmental requirements of NY/T391- 2000 Class A Limited quantity and variety NY/T392 ～ 394 and codes of practice Environmental requirements of NY/T39- 2000 Non- environmental pollution food Can be used according to the standards Environmental requirements of GB/T1840.1-4-2001 4. Chinese Agro-food Processing of Fruit and Vegetables: Regulating Standards

19. Responding to S&T co-operation with China – The Development of a Cross-Border Agro-Food Processing S&T Platform December 2004  Compared with the developed countries, Chinese current legislation systems related to food safety are not systematic and comprehensive.  Chinese standards on fruit and vegetables in the fields of production, processing and distribution are less developed than in the areas of the product standards.  Several ministries and agencies share the responsibility of the standard regulation, leading to inconsistences, ambiguities and incompatibilities on the fruit and vegetable process industry. The Challenges Facing the Improvement of Chinese Standards 4. Chinese Agro-food Processing of Fruit and Vegetables: Regulating Standards

20. Responding to S&T co-operation with China – The Development of a Cross-Border Agro-Food Processing S&T Platform December 2004 5. Analysis of China’s Key Policies on Agro-food Processing of Fruit and Vegetables  To prevent severe alimentary toxicosis a Market Access System was established by the General Administration of Quality Supervision, Inspection & Quarantine (AQSIQ) in July 2002. By the end of August 2003, more than 7,400 food manufacturers have passed market access evaluation.  The local quality supervision bureaus at the county level are responsible for the market access supervision in their administrative area.  If the company meets the requirements set by AQSIQ, it is conferred a “manufacture permission certificate” and a logo of “QS” can be labelled in the package of the food product. The food with this logo is permitted to be sold in the market. Market Access Policies

21. Responding to S&T co-operation with China – The Development of a Cross-Border Agro-Food Processing S&T Platform December 2004 Can of fruit and vegetable: 15 months; Fruit and Vegetable juice in ring-pull can and glass bottle: 6 months; Fruit-flavour carbonated drinks in glass bottle: 3 months; Canned fruit-flavour carbonated drinks, ratafee and dew wine: 6 months; Fried dry fruit, tomato paste in iron and glass can: 12 months. Shelf Life Policies  In 2000, new food shelf life standards were established for the food products: 5. Analysis of China’s Key Policies on Agro-food Processing of Fruit and Vegetables

22. Responding to S&T co-operation with China – The Development of a Cross-Border Agro-Food Processing S&T Platform December 2004  From 1988 to 2002, the Ministry of Health has promulgated 20 compulsory GMP certification guidelines (one general and the others special). The special GMP guidelines focus on the canned food, glazed fruit, drinks, wine, ratafee, expanded food, healthy food and quick-frozen food, etc.. Good Manufacturing Practice (GMP) Policies  The GMP guidelines related to fruit and vegetables include:  Sanitation Criteria for Can Processing Enterprises for Export.  Sanitation Criteria for Drinks Processing Enterprises for Export.  Sanitation Criteria for Quick-frozen instant food Processing Enterprises for Export etc. 5. Analysis of China’s Key Policies on Agro-food Processing of Fruit and Vegetables

23. Responding to S&T co-operation with China – The Development of a Cross-Border Agro-Food Processing S&T Platform December 2004  In 2002 the Certification and Accreditation Administration developed the Regulation on Administration of HACCP Management System Certification - the government encourages exporting enterprises to pass the HACCP certification.  Government agencies also formalized a list called List of Products of Sanitary Registration for Establishments of Food for Export. The producers of these goods are obliged to implement HACCP and pass the certification.  The Food Safety Program and Activities issued by the Ministry of Health (August 14th, 2003) stipulates that all fruit and vegetable juice and can producing facilities must implement HACCP before 2006.  By the end of August 2003, 44 fruit and vegetable juice processing companies in China whose products are supplied to US market have passed the HACCP certification. Their names are linked to the official website of FDA. HACCP Policies 5. Analysis of China’s Key Policies on Agro-food Processing of Fruit and Vegetables

24. Responding to S&T co-operation with China – The Development of a Cross-Border Agro-Food Processing S&T Platform December 2004  General standard for the food labelling in China (GB 7718-1994) is adapted from Codex’s General Standard for the Labelling of Pre-packaged Foods (CODEX STAN 1-1991). This standard also applies to all pre-packaged foods including fruit and vegetable products in China.  The Guideline of the Logos of Organic Food, promulgated by the State Environmental Protection Agency on April 7th, 2001, stipulates that if over 95% of raw material of a processed product is certified by Organic Food Development Center (OFDC) and the product is processed and packaged in an OFDC-certified processor, the product can be labeled as "organic" and bear OFDC logo.  If less than 95% (but over 70%) of raw material of a processed product is certified, the product can not be labeled as "organic" or use the logo. But in its label, the names and proportions of the certified raw materials can be indicated. Labeling Policies 5. Analysis of China’s Key Policies on Agro-food Processing of Fruit and Vegetables

25. Responding to S&T co-operation with China – The Development of a Cross-Border Agro-Food Processing S&T Platform December 2004  The environment impact assessment law (Sept. 1st, 2003) has great impact on the fruit and vegetable processing enterprises.  At present the environment risk assessment system for fruit and vegetable processing has not been set up in China. However, fruit and vegetable production and processing must follow the relevant Chinese environmental regulations and avoid environmental pollution.  On December 8th, 1998 China Packaging Technology Association and China Packaging Parent Company set down the instructions for reusing package materials and call-back. Environment Risk Assessment Policies 5. Analysis of China’s Key Policies on Agro-food Processing of Fruit and Vegetables

26. Responding to S&T co-operation with China – The Development of a Cross-Border Agro-Food Processing S&T Platform December 2004  China government has initiated a series of cleaner production projects since 1993.  Most of China provinces, autonomous regions and municipalities have organized the training programs of the cleaner production since then.  China's cleaner production promotion law is effective since Jan. 1, 2003. Cleaner Production Policies 5. Analysis of China’s Key Policies on Agro-food Processing of Fruit and Vegetables

27. Responding to S&T co-operation with China – The Development of a Cross-Border Agro-Food Processing S&T Platform December 2004 Porto - Portugal Edificio “Les Palaces” Rua Júlio Dinis, no. 242, 208 4050-318 Porto, PORTUGAL Tel: 22 607 64 00 Fax: 22 609 91 64 spiporto@spi.pt TagusPark Núcleo Central, 232 2780 - 920 Oeiras, PORTUGAL Tel: 21 421 22 49 Fax: 21 421 12 01 spilisboa@spi.pt Beijing – P.R.China XueYan Building A108, Tsinghua Science Park Tsinghua University, Beijing 100084 P.R. CHINA spichina@spi.pt Irvine (California) - USA 2102 Business Center Drive, Suite 220E Irvine, CA 92612 USA Tel: +1 949 253 5702 Fax: +1 949 253 5703 spiusa-irvine@usaspi.com Columbia (Maryland) - USA 10025 Governor Warfield Parkway, Suite 214 Columbia, MD 21044 USA Tel: +1 410 997 5600 Fax: +1 410 997 3554 info@usaspi.com Lisbon - Portugal www.spi.pt

28. Responding to S&T co-operation with China – The Development of a Cross-Border Agro-Food Processing S&T Platform December 2004 Thank you for your attention!