By Fang Yan

SHANGHAI, China, June 22 (Reuters) - Controversy over the safety of Chinese food products is grabbing headlines around the world, but multinational companies which sell food from China said the issue was not threatening their business.

Executives attending an international food industry conference in Shanghai this week urged China to allay public fears by strengthening its regulation of the sector.

But they noted food safety issues were faced by producers around the world, and said the situation in China was not serious enough to damage the country's growing role as a food exporter.

China shipped $26.7 billion worth of food overseas last year, up 16 percent from 2005, according to commerce ministry data.

"It is inappropriate to single out China as we all have instances related to food safety issues in our backyards," said Jeffrey Ettinger, chief executive of U.S. food products giant Hormel Foods Corp <HRL.N>.

Hormel has been exporting bacon and sausage to Japan from its China plant for years without experiencing a problem, he added.

A spate of U.S. pet deaths traced to contaminated Chinese pet food has caused an uproar in the United States this year. The Bush administration pressed Chinese cabinet members for reassurances on food safety during economic talks last month.

Scandals regularly come to light within the country, such as fake baby milk and fish coloured with carcinogenic chemicals.

Ettinger said some foreign food companies, which he did not name, had stopped sourcing ingredients from China in response to the scandals. But he and other executives said this was not a widespread response in the industry.

"When you open up the newspaper, turn on the radio or watch TV, you see China with this problem ... but is there a country in the world that doesn't have such problem at one point?" said Roland Vaxelaire, director for quality and risk management at Carrefour <CARR.PA>.

The French retailing multinational, which is the top foreign retailer in China, obtained $5.2 billion worth of products including food from China last year, up 13 percent from 2005.

China Huiyuan Juice Group, the country's top maker of fruit juice, began shipping its products to the United States, Europe and Japan more than 10 years ago and has big store chains such as Wal-Mart Stores <WMT.N> among its clients.

The company has never encountered food safety issues in the countries to which it exports, and expects to continue increasing exports, which now account for roughly 5 percent of sales, chairman Xinli Zhu said.

"There are some small domestic firms that don't play by the rules, but they are not representative of Chinese food suppliers in general," he said.

Ettinger and other executives said the Chinese government should coordinate with food and retailing companies to promote strict sourcing and manufacturing standards.

Several executives also urged Beijing to streamline a complex regulatory structure which puts over a dozen government bodies in charge of food quality at the national level.

Ideally, China should have just three to four agencies to oversee food safety, Xiaosong Hu, professor at China Agricultural University, told the conference.

China's food and drug watchdog and the commerce ministry last month called on local governments to intensify supervision of rural produce and step up a crackdown on fake or bad-quality food.

In another sign that Chinese authorities are concerned by the issue, the former head of the State Food and Drug Administration, Zheng Xiaoyu, was sentenced to death for corruption last month. Under his watch, dozens died in China from fake or bad drug and food products. ($1=7.62 Yuan)

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