China will spend $1.1 billion (€800 million) to improve food safety by 2010 and give more power to regulators as the country scrambles to restore confidence in its products after a series of scandals.

The plan, which began two years ago but was only announced yesterday, includes a new laboratory and improved inspection facilities for monitoring food and drug safety.

"Once the plan has been completed, the abilities of the regulator will be substantially increased," said Yan Jiangying, an official with the State Food and Drug Administration. "There will be an enormous improvement in the system for guaranteeing food and drug safety for the public."

The announcement was the latest in a series of statements from the Chinese government aimed at reassuring consumers about goods made in the country after safety problems with toothpaste, tyres, toys and seafood.

Earlier this week, the government outlined plans to ensure safe food for athletes and visitors to the Olympics, including the use of global positioning satellites to help oversee food processing and distribution.

In the wake of the questions about Chinese products in the US, the Chinese government has impounded a number of shipments of exports from the US in recent weeks which has raised fears that the safety problems could escalate into a broader trade dispute.

However, John Frisbie, president of the US-China Business Council, said recent meetings with officials in Beijing had shown the Chinese government recognised there were problems with its regulatory system and showed a willingness to engage with other governments to improve the situation.

As part of the five-year plan to boost product safety, the government will build inspection offices at 16 ports.