I saw an article saying the 5x markup is because of the air freight, which costs more.
Normally, the masks and other gear, are shipped via boat, and it takes over 30 days to transport it. But this is an emergency, so that lag in transport would have killed even more people and health care workers. Hence, the need to deliver it by air.
The problem is that the air freight companies are now resource constrained, that they are charging 3 to 4 times more than normal. These are the people that are causing the price gouging.
Then, to make matters worse, some European countries went on a media blitz to complain about shoddy Chinese made products. They bought non-medical masks, and were expecting it to be medical grade products!
So they complained about it on Twitter, which forced the China central government to crack down on manufacturers, and only allow “medical grade” certified masks to be shipped. This placed an even larger burden on the supply chain. (However, other masks not stamped with a “medical” label on it, were allowed to normally ship, as a consumer-grade item. So buy it at your own risk.)
So, this resulted in news that some expensive air freight flights, were only returning half-full. The other half was still sitting in the warehouse, awaiting customs export inspection approval, from the new Quality Control regulation.
Then, to make matters even worse, all countries all over the world, are now competing for the same products from China. And the Americans are buying the product outright, and in cash, and paying double or triple, what European countries are paying.
This all adds to the cost per product, which ends up justifying the 5x increase.
The freight costs makes sense and that's a great counterpoint. Thanks!
That said, the government has the ability to cap mask costs per unit and then only charge for shipping or, you know, bring a bunch of C5s and do the freight themselves to get the cargo hours. Or charter planes to help with airline bailouts or...
Instead of hammering the hospitals we have all sorts of options to help here. The fact that the only thing that occurred was HARMFUL to the process says a lot. It must feel pretty weird to be told "you're on your own" and then also have that same crew confiscate your mask shipments. That's what the mafia would do. Would be a shame if something happened to your PPE...
> which forced the China central government to crack down on manufacturers, and only allow “medical grade” certified masks to be shipped.
There is way more to it than that. That was a very convenient pretext for China to legitimise its unofficial exports ban. It reduced the number of exporters to single digits per provice, and even few ones with appropriate licenses are now being turn arond at customs without explanations.
China's official Red Cross, however, seems to have zero problem exporting just anything off the shelf.
Even supplies for which there simply can't be a medical certification are stalling at customs. I know a person who works in medical clothing industry, and they ran into that with... hospital bedsheets.
As of now, the lion share of PPE coming from China is effectively being smuggled out.
> China's official Red Cross, however, seems to have zero problem exporting just anything off the shelf.
> Even supplies for which there simply can't be a medical certification are stalling at customs.
I don't think there is way more ongoing. That's just how things work in China and CCP's distinct way of being incompetent. CCP is known for its intolerance of critics, especially when covered by international news firm. They try their best to avoid it, not considering anything else. When someone in country create buzz, they censor it, sometimes arrest the author. When someone they can't arrest does it, they suppress what they can to "avoid the problem". This is politic and weighted more than anything else. A lot of party members still don't recognize free market and a strong private side as being important, especially Xi. After all they are communist.
In this case, the problem was seen as "some shady businessmen exporting unreliable masks for their own profit and got caught, it harms our 'global image'". So they took them down, switched to assuming everything coming from private side are garbage unless you can prove otherwise.
OTOH, government-ran Red Cross have zero problems because they are "trusted and endorsed".
> In this case, the problem was seen as "some shady businessmen exporting unreliable masks for their own profit and got caught, it harms our 'global image'". So they took them down.
No, no, no, no. The point I make is very different. Don't think of them as that dumb.
While, yes, a giant amount of PPE is now being exported in contravention of the ban, the very few well connected companies are making 8 digit sums per day thanks to it.
Also, the Chinese red cross is now very happy with PPE makers having no way to sell their stuff to the West, because now they can buy piles of it on the cheap for export through their "special channel."
The same thing has happened during the ASF outbreak last year. Pork prices soared N-fold, state media were all screaming murder, the national pork reserve was unsealed, but... at the same time, pork importation was quietly banned using overzealous sanitary inspections, culls of otherwise healthy pigs were ordered, and somebody made billions.
it's not cheap even domestically, N95 china retail price is 20RMB right now (not like 3M, domestic brands). Compare to US price ~$6-7 most of that difference is shipping. The price inflation goes all the way to the source production equipment and raw materials, it's every step.
I haven't seen N95 prices that cheap here in weeks. Anything I see is mostly around 30RMB right now (like a 3Q with NIOSH certification). KN95s are still lower.
We've talked with multiple vendors who simply can't get non-woven material stock at all and are having to turn away orders.
It reminds me of Operation Barbarossa. Many reconnaissance pilots rang the alarm about the huge buildup of German forces near the Soviet border (in Poland). They weren't only ignored, but threatened. That continued even early into the German attack. German soldiers swam across the river to warn the Soviets. They were shot as enemy agents.
You don't prevent a fire by taking the piles out of the smoke detector.
If you build a culture where reporting problems is dangerous, you'll only hear good news that can be shared and catastrophic news that can't be ignored.
I know the Chinese government has been pushing the narrative that it was those European countries fault for buying the wrong product, but it's just not true. Everyone is perfectly OK with using non-medical industrial filtration masks under the circumstances. The reason that European countries have had to recall a bunch of Chinese masks is that they didn't meet the filtration standard they claimed to be made to, full stop. They let through substantially more particles than the standard allowed when tested. They also failed fit testing, which would make them unusable anyway.
These masks failed quality tests, but they were made by private manufacturers in China, that had no relation to the China government.
However, because they are stamped, “Made in China”, then they tarnished China’s international image.
And the European countries really didn’t help themselves here, when they did their media blitz, and claimed that the China-made masks were defective. Thereby insinuating that every single mask that is shipped out of China, is under the control and responsibility of the central China government.
Then, the entire Twitterverse lit up in laughter as: “Ha ha! See, we told you so! China only makes piece-of-shit crap! Now, they are selling us crappy medical products too!”
No it doesn't support that narrative. The claim in the comment I'm replying to is that the masks made by those private manufacturers weren't defective at all, and that the European purchasers went on an unfair "media blitz to complain about shoddy Chinese made products" when actually it was their fault for ordering the wrong kind of masks. That claim is completely and utterly false. The kind of mask they'd ordered would've worked perfectly well for their purpose if it was actually as described rather than a shoddy imitation that was, to quote the Dutch media reports, "some sort of FFP0.8 at best" instead of the roughly FFP2 it should've been.
Normally, the masks and other gear, are shipped via boat, and it takes over 30 days to transport it. But this is an emergency, so that lag in transport would have killed even more people and health care workers. Hence, the need to deliver it by air.
The problem is that the air freight companies are now resource constrained, that they are charging 3 to 4 times more than normal. These are the people that are causing the price gouging.
Then, to make matters worse, some European countries went on a media blitz to complain about shoddy Chinese made products. They bought non-medical masks, and were expecting it to be medical grade products!
So they complained about it on Twitter, which forced the China central government to crack down on manufacturers, and only allow “medical grade” certified masks to be shipped. This placed an even larger burden on the supply chain. (However, other masks not stamped with a “medical” label on it, were allowed to normally ship, as a consumer-grade item. So buy it at your own risk.)
So, this resulted in news that some expensive air freight flights, were only returning half-full. The other half was still sitting in the warehouse, awaiting customs export inspection approval, from the new Quality Control regulation.
Then, to make matters even worse, all countries all over the world, are now competing for the same products from China. And the Americans are buying the product outright, and in cash, and paying double or triple, what European countries are paying.
This all adds to the cost per product, which ends up justifying the 5x increase.