Wei Chuanzhong, vice minister of the Administration for Quality Supervision, Inspection and Quarantine, said Chinese companies sold the industrial solvent called 'TD glycerin', to Spanish companies who then sold it to Panamanian companies. The product was then used to make cough syrup and other medicine.
"The Panamanian business people are mainly responsible because they changed the scope of use and shelf-life of this product," Wei said.
The deaths in Panama, which began last year, have dramatically added to a growing international alarm about the safety of food and medicines exported by China.
Wei acknowledged that the Chinese manufacturer, Taixing Glycerin Factory, and the Chinese distributor, CNSC Fortune Way, "engaged in some misconduct," because they used the name TD glycerin for a mix of 15 percent diethylene glycol and "other substances."
Diethylene glycol is a chemical commonly used in antifreeze and brake fluid.
"They used the very confusing name of TD glycerin, which will mislead people to think it's glycerin," said Wei. "The markings on the package also used the name glycerin instead of TD glycerin."
But he said the Panama traders bore the brunt of the responsibility for the deadly substance ending up in medicine.
"The Panama trader changed or altered the paperwork to say the substance was medical glycerin that met U.S. standards for use in medical products and changed the shelf life of the already expired product from one year to four years," Wei said. "The responsibility here is very clear."
He said the Chinese investigation found that the Chinese side made it clear in their export paperwork that the material they were selling was for industrial, not medical, use.
Wei said Taixing had been punished for its misbehavior but when pressed for details, he said the company was still being investigated.
He said China would not continue to allow the use of the name TD glycerin, but no ban has been formally announced.
Glycerin, which is often processed from animal fats and occurs naturally in the human body, is a sweet liquid that can give cough syrup and other remedies thickness while preventing them from dissolving in water. It is used in many kinds of medicines all over the world.
The first documented poisonings were reported in October, but Panamanian authorities said there may have been earlier cases that went undetected. Fifty-one people died after taking the tainted medications and 68 were hospitalized.