BEIJING - China said Wednesday it will cut the number of small, loosely regulated food producers by half as it struggles to salvage its reputation as a safe exporter.

The country's food and drug agency also announced stricter rules for approving new drugs, a day after its former head was executed for accepting bribes to approve untested medicine.

Starting in September, all food exported from China will have an inspection and quarantine symbol to guarantee safety, the administration said.

The measures are part of China's efforts to clarify regulations, tighten enforcement and clean up corruption -- factors underpinning its perennially poor food and drug safety record.

The country's top food and drug watchdog said the 2008 Olympics would give China a chance to prove to the world that it was capable of setting a new standard for food safety.

China's small-scale food producers have been accused of unsanitary production conditions, using tainted or substandard ingredients and failing to register with authorities.

In a mandate issued Tuesday, China's food safety watchdog said small-scale producers will have to renovate their operations to meet hygiene standards or be shut down.

Many will not survive and their numbers are expected to be halved by 2009, with all properly certified by 2012, the General Administration of Quality Supervision, Inspection and Quarantine said on its website.

The regulations also target the use of recycled ingredients, unapproved additives, and banned substances.

Inspection agencies at all levels need to recognize that "the process will take a long time and the work is complicated and difficult,'' the notice said.

It did not specify how it defines a small-scale producer, or give other details.

AQSIQ official Wu Jianping said Tuesday there are 448,000 food processing businesses in China. Of those, 353,000 -- or 78.7 per cent -- have 10 employees or less.

Chinese authorities announced last month that they had closed 180 food factories since December after inspectors found formaldehyde, illegal dyes and industrial wax being used to make candy, pickles, crackers and seafood. All had fewer than 10 employees.

Another regulating agency said it shut 152,000 unlicensed food producers and retailers last year for making and selling fake and low-quality products.

According to the notice posted Wednesday, the quality administration said about half -- or 223,297 -- factories it inspected nationwide were not completely certified. Another 164,149 had no certificate at all, it said.

Most manufactured commonly consumed food like rice, wheat powder, soybeans, wine and cooking oil.

Importers of Chinese goods, especially the United States, have grown extremely wary as the list of products tainted with deadly toxins and dangerously high levels of chemicals grows each day.

Amid such concerns, the execution of Zheng Xiaoyu, who headed the State Food and Drug Administration from 1997 to 2005, was the strongest indication yet of Beijing's determination to improve product safety.

In a commentary, the Communist Party's mouthpiece People's Daily newspaper said Zheng's execution was warranted because of the serious consequences of approving untested medicine in return for millions of yuan (dollars, euros) in cash and gifts.

"He damaged the interests of the country and the people to a large extent,'' the newspaper said.

Bogus drugs approved by Zheng included an antibiotic blamed in the deaths of at least 10 people.

Wu Zhen, the administration's vice director, said new regulations on drug approvals will take effect in October.

Wu also said that leukemia drugs produced by the Shanghai Hualian Pharmaceutical Co. Ltd., which were suspended pending an investigation, were found to be safe.

Sales of methotrexate were suspended after patients in Guangxi autonomous region in southern China and in Shanghai said they suffered leg pain and could not walk after taking the medication.

The drug is widely used to treat leukemia and other cancers as well as autoimmune diseases such as rheumatoid arthritis.

"Difficulty in walking is a normal adverse reaction of the medicine,'' Wu said at a news conference broadcast on the Internet.

The agency and the Health Ministry will send a joint team to Shanghai and Guangxi for further investigation, he said without elaborating.

Meanwhile, SFDA director Shao Mingli was quoted Wednesday on the administration's website as saying that Beijing was capable of controlling food safety during the 2008 Summer Games.

China's food safety work for the Games would serve as a "model for food safety work in China'' and for future Olympic events, he said.