China's Milk System "Out Of Control"

China's agriculture minister acknowledged Tuesday that the country's milk-gathering system was "out of control" and led to abuses that put contaminated dairy products in stores across Asia, sickening some 54,000 babies and killing four.

At least six Asian countries banned or curbed imports of Chinese dairy products, and the World Health Organization warned of possible smuggling of melamine-tainted infant formula across borders. The European Union told customs authorities to keep a closer eye on food imports from China.

Melamine, used to make plastics and fertilizer, has been found in infant formula and other milk products from 22 Chinese dairy companies. Suppliers trying to cut costs are believed to have added it to watered-down milk because its high nitrogen content masks the resulting protein deficiency.

Since the discovery of tainted milk was made public, China's government has scrambled to respond. Recent days have seen a number of arrests and forced resignations of officials as reports of sickened children spread outside the Chinese mainland to Hong Kong and Macau.

Chinese state television reported that the company at the center of the scandal, Sanlu Group Co., received complaints about tainted formula beginning last December and waited eight months to tell the local government, which then waited another month before informing higher authorities.

Agriculture Minister Sun Zhengcai told a meeting with the health and public security ministries that the industrial chemical melamine was likely added at stations that collect milk from small individual dairy farmers.

"Since milk stations began only in recent years, the country now has no specific method of supervising them, or clear-cut supervision department. The purchasing process of raw milk is basically out of control," Sun said, according to a summary of his comments posted Tuesday on his ministry's Web site.

"We must crack down on them with the greatest determination and the toughest measures," Sun said in the meeting held late Monday.

A group of 316 Chinese milk producers and retailers issued a joint statement promising to keep the dairy industry clean, state broadcaster China Central Television reported late Tuesday.

Among other things, producers promised to reject sub-standard raw materials, strictly inspect production, and take responsibility for product quality. Retailers also promised closer inspections.

Sanlu had no comment Tuesday about the allegations on state television.

CCTV reported Monday night that an investigation by the State Council, China's Cabinet, found that Sanlu had been receiving complaints about its infant formula as early as December 2007. The dairy company discovered melamine in its milk powder in June but did not report it to city officials until Aug. 2, it said.

"During these eight months, the company did not inform the government and did not take proper measures, therefore making the situation worse," CCTV said.

The Shijiazhuang city government then failed to report the case to the Hebei provincial government until Sept. 9, CCTV said. Sanlu products were recalled from stores two days later and Shijiazhuang's top Communist Party official fired.

Anthony Hazzard, the Western Pacific director of the World Health Organization, said 82 percent of the children made sick by the formula were 2 years old or younger.

The sick included 12,892 babies in hospitals, 39,965 who have received outpatient treatment, and an additional 1,579 patients discharged from hospitals, he said, citing China's Ministry of Health.

Hazzard said countries had been advised to focus particularly on smuggled formula by the International Food Safety Authorities (INFOSAN), a network of 167 countries organized by the WHO and the Food and Agriculture Organization.

He said authorities do not know at this stage what countries may have received the contaminated products.

"I think the greatest fear is if there has been illegal movement of the heavily contaminated products rather than the legal movement of products that may have very low levels of melamine," said Hazzard, speaking in Manila where the WHO's regional headquarters is located.

The head of the Chinese agency that monitors food and product safety stepped down Monday. The resignation of Li Changjiang, who headed the General Administration of Quality Supervision, Inspection and Quarantine since 2001, comes a year after he and the government promised to overhaul the system in response to a series of product safety scares.

New regulations and procedures were introduced in an attempt to restore consumer confidence and preserve export markets after a string of recalls involving tainted toothpaste, faulty tires, contaminated seafood and in March 2007, pet food containing melamine that was blamed for the deaths of dogs and cats in the United States.

According to the Health Ministry, of the 53,000 sickened children, 12,892 remain hospitalized, with 104 in serious condition. Another 39,965 children were treated and released.

Baby formula and other milk products have been pulled from stores around the country and Chinese dairy products have been recalled or banned in Bangladesh, Japan, Singapore, Vietnam, Brunei, Malaysia and Hong Kong.

A total of five children outside the Chinese mainland - in Hong Kong and Macau - have been diagnosed with kidney stones after drinking Chinese-made milk products and Hong Kong regulators found tainted cake, officials said Tuesday.

A 16-month old child in the southern Chinese gambling enclave Macau was diagnosed after being fed Nestle milk powder made in China's northeastern Heilongjiang province, the government said in a statement. No government tests have found melamine in Nestle milk products, and Switzerland-based Nestle said its milk products sold in China and Hong Kong are "absolutely safe" and that none are made from tainted milk.

European Commission spokeswoman Nina Papadoulaki said national customs authorities across the EU were asked last week to step up checks on imports of "composite products," such as bread or chocolate, to ensure they contain no traces of contaminated milk. She said the EU's 27 member states do not import baby formula or other dairy products from China.

One of China's biggest milk producers, China Mengniu Dairy Co., saw its stock price plummet slightly more than 60 percent in Hong Kong trading Tuesday after its products were found tainted with the industrial chemical melamine.

Mengniu, China's No. 1 dairy producer in total volume, said only a small portion of its products were contaminated and blamed the contamination on "the illegal acts of some irresponsible milk collection centers and raw milk dealers."