China to Crack Down on Large-Scale Smuggling of Masks by Baggage Traders

Export Inspection Delays and Prosecutions
Up to 2 Years Imprisonment or Fines for Hoarding
Public Petitions Demand Direct Price Controls Continue

On the 5th, amid ongoing concerns about the spread of the novel coronavirus infection, Chinese nationals at Incheon International Airport Terminal 1 departure hall are organizing masks into boxes to send to China.
Yeongjongdo - Photo by Kim Hyunmin kimhyun81@

[Sejong=Asia Economy Reporter Kim Hyun-jung] The government has decided to strongly punish large-scale overseas exports of masks, whose demand has surged sharply due to the novel coronavirus infection (Wuhan pneumonia). Some argue that direct government price control measures should also be added.

On the 5th, Hong Nam-ki, Deputy Prime Minister and Minister of Economy and Finance, announced at the 3rd Economic Ministers' Meeting on Novel Coronavirus Response held at the Government Seoul Office, "If more than 1,000 masks or hand sanitizers, or exports exceeding 2 million won, are shipped abroad, the simplified export procedure will be converted to a formal export procedure to preemptively block large-scale overseas exports." Hong also warned of strong measures, stating, "If it is suspected that the goods were collected through hoarding during export inspection, customs clearance will be withheld and a complaint will be filed."

Hong Nam-ki stated, "If it is suspected that the goods were collected through hoarding during export inspection, customs clearance will be withheld and a complaint will be filed." This government measure aims to prevent Chinese peddlers from purchasing masks in large quantities domestically and exporting them abroad.

Earlier, the Ministry of Economy and Finance decided to enforce the "Notice on Prohibition of Hoarding of Masks and Hand Sanitizers" from midnight on the same day until April 30. Hoarders face imprisonment of up to two years or a fine of up to 50 million won. This is due to the rapid price surge caused by the sharp increase in demand from the spread of the novel coronavirus and hoarding by overseas distributors such as Chinese merchants. In fact, a price survey conducted by the Consumer Citizens' Organization targeting online sellers as of the 31st of last month showed that the average price per adult KF94 mask was 3,148 won, a 2.7-fold increase compared to two years ago.

On the Blue House National Petition website, there has been a flood of petitions requesting the government to directly control mask prices to prevent them from soaring. As of the morning of the same day, more than 20 petitions were posted. Along with strong punishment for profiteering sellers, proposals have been made that essential items such as masks and sanitizers, which can prevent novel coronavirus infection, should be produced directly by the state.

Legally, government price control on specific goods is possible by setting a price ceiling rather than limiting the rate of increase. According to Article 2 (Designation of Maximum Price, etc.) of the "Price Stabilization Act," the government may designate the maximum price for particularly important goods at production, wholesale, and retail stages and by region when deemed necessary for the stability of citizens' lives and the national economy. The authority to designate lies with the Minister of Economy and Finance. Currently, only anthracite coal and briquettes, which greatly affect the low-income economy, are managed by setting maximum prices.

However, experts are concerned that if the government intervenes under public pressure, confusion may worsen. Professor Kim Tae-gi of Dankook University’s Department of Economics said, "In a situation where economic damage caused by anxiety is expected to be greater than the actual damage (infection) from the novel coronavirus, premature government intervention could lead to a vicious cycle in the market," adding, "Price or quantity controls may only increase fear."

This content was produced with the assistance of AI translation services.