Foreign orders for Chinese face masks continue to pour in
By Yin Yeping and Wang Cong Source:Global Times Published: 2020/5/21 17:33:40
Misconceptions about quality persist among potential buyers
Orders for 100 million surgical masks from Europe and Canada have failed to find Chinese suppliers for weeks, as many Chinese factories are scrambling to complete orders of KN95 masks with higher profit margins, according to industry insiders.
A manager of a mask factory in Central China's Henan Province said that the company had received orders for 100 million surgical masks from clients in Canada and Hungary in early May that needed to be delivered within 10 days, but it seems that no Chinese suppliers have accepted the orders.
The manager, who preferred to be called Li, told the Global Times that his factory is fully booked with earlier orders including 70 million KN95 masks ordered from the US, and it has no extra capacity.
"The problem is that the clients want the masks on very short notice and want to sign the contracts next week," he said, adding that the foreign clients expected the goods to be delivered in batches, with the first batch of 30 million to be delivered to Canada, and the rest to be shipped to other locations within 10 days.
Another hurdle is the limited number of Chinese factories that have received the necessary regulatory certificates from authorities in the EU, US and Canada, Li and other industry insiders said.
"We are looking at other mask suppliers that have export certificates such as those from the FDA and CE, but so far we haven't been able to find one," he said, adding that they had expected to dispatch the orders to one supplier, but it may be necessary to share the orders among a group of suppliers.
Rising demand and competition among buyers are normal, according to Bai Yu, president of the Medical Appliances Branch of the China Medical Pharmaceutical Material Association. "In the short term, it will be very difficult to find a supplier that can deliver the goods in a short span and at a lower cost than those in China. That's the big picture," Bai told the Global Times, adding that he knows there are big export orders coming in, with some even calling for up to 200 million masks in a single deal.
Data released by China customs on Sunday showed that, from March 1 to May 16, a total of 134.4 billion yuan ($18.8 billion) worth of anti-epidemic supplies were exported, including 50.9 billion masks. In addition, from January to April, exports of pandemic prevention materials such as masks and protective clothing grew rapidly, leading to a 5.9 percent increase in textile exports.
With more than 10,000 factories, China has a much bigger capacity to meet rising demand, with some estimating China's output could meet 10 times the global demand for masks.
But regulatory hurdles and misconceptions about the quality of Chinese-made masks have seriously undermined supply, according to industry insiders.
"Buyers in some foreign countries don't know much about China's mask industry," Bai said.
Some believe wrongly that Chinese qualifications for mask production are not as good as in the West, which is not the case, as some medical supplies are not allowed to be sold in China even if they meet US standards, Bai added.
Bai said that there are many qualified mask factories in China, but only around 5 percent have obtained certifications from Europe and the US, so much of the potential production capacity cannot be utilized.
Concern over the quality of Chinese-made masks also stems from sub-standard masks procured by overseas middlemen, who tend to prioritize profits over quality, according to Chen Hongyan, a Beijing-based industry analyst of medical supplies.
"These suppliers offer low prices but they do not meet the standards, and they certainly cannot represent the majority of Chinese mask suppliers, but the middlemen only care about profits, not quality," Chen told the Global Times. She said that China has already moved to crack down on those suppliers.
Still, rigid demand for protective items such as masks will continue to mount. The US and some European countries did not pay adequate attention to masks in their prevention and control of the pandemic and now they are catching up, especially as they reopen their economies, industry analysts said.
Global novel coronavirus cases exceeded 5 million as of Thursday afternoon, Beijing time, with the US continuing to lead at 1.5 million, according to data from Johns Hopkins Coronavirus Resource Center.
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