UPDATE 1-Wal-Mart tightens quality standards for China suppliers

(Adds details, quotes, background, byline)

By Kirby Chien

BEIJING Oct 22 (Reuters) - The world's largest retailer, Wal-Mart Stores Inc (WMT.N), said on Wednesday it would begin forcing Chinese suppliers to meet new quality standards and assume responsibility for their subcontractors.

The move comes after a slew of recalls of Chinese-made goods have raised fears about the safety and oversight of merchandise produced in the country.

"We expect you to tell us not just where the tennis shoes were assembled but which subcontractor played a role in making them," Mike Duke, vice chairman of the international division, said at a company conference in Beijing, attended by many of the company's suppliers.

He did not say specifically how the quality standards would be tightened but said the company wants suppliers to have "safe and healthy" work environments, offer fair compensation and meet their environmental obligations.

Duke said by 2012 Wal-Mart aimed to have all its suppliers source 95 percent of their production from companies that have received the highest rating from Wal-Mart audits.

"We expect you to have the answers and to take ownership in getting to the root of the problem," Duke said.

Wall-Mart, with more than 60,000 suppliers worldwide, procures roughly $9 billion worth of goods directly from China.

Duke said the new standards would begin in November for certain product lines, including apparel, and gradually cover all the company's products.

After millions of Chinese-made goods were recalled in 2007, ranging from toys to pet food, Wal-Mart chief executive Lee Scott said this year that Wal-Mart would be tougher with suppliers.

In recent weeks, China has been rocked by a tainted milk scandal in which thousands of infants have fallen ill. This week, U.S.-based Delta Enterprises recalled almost 1.6 million cribs made in China after two babies died. The cribs were sold at Wal-Mart as well as U.S. chains Target Corp (TGT.N) and Kmart.

(Additional reporting by Nicole Maestri in New York)

($=6.83 yuan) (Reporting by Kirby Chien; Writing by Ken Wills; Editing by Anne Marie Roantree)