Masks that were sold out in China are now facing manufacturer bankruptcy risks

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[Asia Economy Beijing=Special Correspondent Park Sun-mi] Chinese mask manufacturers are facing bankruptcy despite the global increase in mask demand.

According to the Global Times on the 9th, the Chinese mask manufacturing industry is on the brink of collapse due to a sharp decline in domestic sales. Although global demand for masks continues to rise amid the worldwide spread of the novel coronavirus infection (COVID-19), China, which has shown limitations in producing masks for export, is failing to fully capitalize on this opportunity.

Bai Yu, chairman of the China Medical Device Association, warned, "More than 95% of Chinese mask factories could go bankrupt in the second half of the year," explaining, "Ironically, global mask demand remains strong, but many Chinese mask manufacturers are closing their factories." He pointed out, "At the beginning of the COVID-19 outbreak, there were hundreds of qualified mask suppliers, but now the number has increased to over 10,000, yet only a few have obtained US FDA or European CE certification."

He added, "The production capacity of Chinese mask manufacturers can cover ten times the global demand, but overseas demand and domestic supply can only be met if countries like the United States recognize China's quality standards," noting, "There is a lack of understanding of Chinese standards in countries around the world."

The newspaper reported that many Chinese mask producers, blocked from exporting overseas, have recently begun downsizing to reduce losses due to a sharp drop in domestic mask sales.

A representative of a mask manufacturing factory in Shandong Province said, "We are looking for buyers who can take over two mask production machines," adding, "We have put the equipment up for sale at half the purchase price." He explained, "There are too many mask producers now, and competition has become fierce. We have been producing KN95 masks, but with domestic demand plummeting, we turned to overseas sales. However, it became difficult to export because FDA and CE certifications cannot be obtained in a short period. As a result, mask sales in May decreased by 20% compared to April, and prices dropped by half."

A medical supplies trader said, "There is still strong demand for masks overseas, but the requirements for obtaining FDA and CE certifications are a major barrier between supply and demand," adding, "Only a very small number of mask factories in China have obtained FDA or CE certification and can accept orders."

The newspaper cited data from Chinese information provider Tianyancha, reporting that the number of newly registered mask-related companies in China in May was 10,283, a 70% decrease compared to April.