Partially encouraged by the demonetization rule laid down by Trump administration, a widespread fear captured the minds of Government and population across the globe that sourcing products from China, especially exports of personal protective equipment supply by China to the US would disappear. The Covid-19 pandemic outbreak in China caused European Union to worry that the outbreak might result in PPE supply disruption. The drop in the production of PPEs in China though feared to be very precipitous, however, the currently released data of Chinese custom does not prove it. The production of necessary hospital supplies did undergo a sharp decline in the first three months of 2020, which was quite evident, but only by fifteen percent. The reason behind the drop was not only because of Trump’s retaliating trade war or China’s need for hoarding the equipment for itself, but was quite complex. Based on the current evidences, the ramped up production of essentialities provides a ray of hope given huge shortage of PPES, masks, and hospital gowns.
Also, according to the reports provided by New York Times, China has increased its rate of manufacturing masks, and is now manufacturing one hundred and sixteen million masks regularly. This count is twelve times the supply before the pandemic outbreak. Based on this huge, yet steady production of hospital essentials, Chinese government has decided to supply masks to Europe, Italy, and the United States.
These results, though hopeful, should not reduce the pressure on local and national governments across the globe to provide financing to ramp up the production of these essentials as the pandemic outbreak spreads and the requirements grow.
Hopefully, China’s ramped up production will reduce the government’s pressure and they may feel reduced enforcement to rampant new trade barriers, and finally start sourcing products from China.
The whole World is Reliant on China for the Import of PPE and Other Medical Gears
During the pandemic outbreak, the world’s population looked upon China as a savior. They expected China to provide the required essentials. Also, the government of various countries feared that the medical workers, especially the frontline workers, would significantly suffer shortage of the medical supplies. With demand of masks and PPEs already spiking in China as the number of affected patients grows in number, conditional reports there fuelled up the concern, given how vital China is considered as a global supplier of medical gear.
China is responsible for providing forty three percent of the world’s medical imports, including personal protective equipment, gloves, goggles, mouth and nose protective equipment, and so on. Although many countries produce their own medical essentials regionally, China acts as a major player when it comes to sharing of imports.
A third factor that weighed in China’s favor is its ability to continue to export of the hospital essentials as soon as it stepped in the mid-march. At a State Council press briefing on March 6, the government of China indicated that it had managed to scale up Chinese production of some key hospital supplies, noting its daily output of protective clothing had increased drastically.
Nevertheless, it remained unclear how much earlier that Chinese production had expanded and what the impact of increased production would have been on China’s exports.
China’s Export of PPE Fell in the Early 2020
According to the official custom data released on March 2020, china’s export of the personal protective equipment and sourcing products from China fell by fifteen percent in the first two months of 2020 in relative to the same time in the previous year. Export of all other equipment from China to the other countries fell by seventeen except the PPE. This scenario is similar with the export of PPE to the key trading partners of China. On one hand where China’s export of hospital gear fell by seventeen percentage to European Union, in another hand, its export of other products witnessed a fall by twenty percentage to the same European Union.
The United States experienced a fall of PPE imports from China by nineteen percent, which was slightly more than the drop of PPE import. This clearly shows that China was not holding back the production and export of PPE voluntarily to the United States during the pandemic outbreak. The decline in PPE’s export to the United States from China was lesser than the decline in the percentage of all other products that got imported to the United States from China, which is twenty-eight percent.
In fact, China took off the global supply of certain products from the market by accelerating nd enhancing the import of these products. Although China was leading the list of exporters who exported the essential medical gears to the countries worldwide, its requirement for the hospital gears doubled the imports of PPE during the same period.
Government Can Relax the Trade Restrictions on the Hospital Essentials
All the countries across the globe, including European Union and the United States are required to gear up the production of the personal protective equipment and other medical supplies. In addition to this, the world requires an increased supply of medical equipment from China. But a fear still loiters among the government of several countries that China had potentially kept the medical supply export to halt. The government is still worried about the fact that this mentality of Chinese suppliers have not yet materialized. But depending on the data provided by Chinese custom officials show that China should not be held responsible for the decrease in the export percentage of the medical equipment.
These data will probably help policy makers to rest and reduce their fear. The policy makers are expected to trust these data collected from the Chinese officials and believe that China indeed did not impose any restriction on the export of the medical requirements. Sourcing products from China will continue to be the same as it was a year back. China did not voluntarily cut off the medical supplies to the world during the first two months of 2020. Government officials of the European Union and the United States should be relieved about the future access to hospital gears and consider removing their export restrictions as soon as possible.