Chinese-made toothpaste containing the toxic substance, which can cause kidney failure, paralysis and death, has been yanked from sale in North and South America, Europe and Asia in recent weeks.
Diethylene glycol is used as a low-cost substitute for glycerin, a sweetener commonly found in drugs, food, toothpaste and other products. Although there have been no reports of health problems stemming from the toothpaste, dozens of people in Panama died last year after taking medicine contaminated with the chemical imported from China. It was passed off as harmless glycerin.
"From today onwards, toothpaste manufacturers are not allowed to use diethylene glycol as an ingredient," the General Administration of Quality Supervision, Inspection and Quarantine said in a notice posted late Wednesday on its Web site.
While China has never had guidelines banning diethylene glycol, or DEG, in toothpaste, the statement said the vast majority of Chinese toothpaste manufacturers have already stopped using it in order to reassure consumers and "to avoid unnecessary losses incurred by exporting manufacturers."
But, it said, the ban also extends to imported products and reiterated China's official stance that diethylene glycol in small quantities is safe, based on tests carried out by Chinese health experts in 2000.
"Long-term use of toothpaste containing DEG in amounts less than 15.6 percent will not have a negative health impact on humans," the administration said. "Currently there's no evidence to show that the use of DEG in toothpaste directly causes cases of poisoning in people. ... Consumers should not be concerned."
The announcement is the latest in a string of moves by China to clarify murky regulations, tighten enforcement and clean up graft -- factors underpinning its poor food safety record -- as it fights to prove it is not a danger to the global supply chain.
In recent weeks, 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 daily, from frozen fish to juice to toys.
Also Wednesday, the government ordered small, loosely regulated food producers to clean up their act and announced stricter rules for approving new drugs, a day after the former head of its food and drug agency was executed for accepting bribes in exchange for letting fake medicine into the domestic market.
China's small-scale food producers have been accused of unsanitary production conditions, using tainted or substandard ingredients and failing to register with authorities. While their products generally are sold only in local areas, their continued existence helps explain why China is facing a food crisis.
In a separate statement on its Web site, the quality watchdog warned that small-scale producers will be shut down unless they renovate their operations to meet hygiene standards.
Those manufacturers must also avoid using recycled ingredients, unapproved additives and banned substances, the administration said.
By 2009, their numbers are expected to be halved, with all properly certified by 2012, it said.
Additionally, all food exported from China will have an inspection and quarantine symbol to guarantee safety starting in September, it said.
China has repeatedly asked exporters to ensure the quality of their products, a Commerce Ministry spokesman said Wednesday.
"After the recent spate of product quality or safety problems, the Chinese government has attached great importance to this issue," Wang Xinpei said, according to a transcript posted online. However, he added, "problems in individual products should not be extended to the overall quality of China's exported products."
The quality administration did not specify how it defines small-scale producers in its crackdown, or give other details. But it has said that about 350,000, or 78 percent, of China's food processing operations employ 10 people or less.
The agency also said about half -- or 223,297 -- of the 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.
Last month, Chinese authorities said 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.
Meanwhile, the State Food and Drug Administration said the 2008 Beijing Olympics -- a source of national pride -- would give China a chance to prove to the world that it was capable of setting a new standard for food safety and raise awareness domestically about the issue.
The Beijing Games would serve as a "model for food safety work in China" and for future Olympic events, director Shao Mingli was quoted Wednesday as saying in a news conference broadcast on the Internet.
Amid such concerns, the execution of Zheng Xiaoyu, who headed the State Food and Drug Administration from 1997 to 2005, was another strong indication 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 dollars in cash and gifts.
"He damaged the interests of the country and the people to a large extent," the newspaper said Wednesday.
Bogus drugs approved by Zheng included an antibiotic blamed in the deaths of at least 10 people.