BEIJING -- China is offering support to companies that invest in equipment to increase output of medical supplies needed to combat the deadly coronavirus epidemic.
State officials are encouraging manufacturers of masks and similar products to purchase additional equipment to resolve a supply shortage. The government will buy back the extra equipment later if there is an early resolution to the crisis.
This offer marks a reversal of sorts for Beijing's yearslong effort to cut excess capacity in manufacturing, illustrating China's determination to remedy the shortfall in medical supplies amid the outbreak.
"There are more than a few companies worried about overcapacity, but we've clearly conveyed that the government will purchase any extra production equipment after the novel coronavirus is resolved," Lian Weiliang, deputy chief of the National Development and Reform Commission, told reporters Monday.
"We want enterprises to manufacture at full capacity as long as the products meet standards," he said.
The government has devised plans to double the production capacity of high-grade N95 respirator masks, Lian said, adding that the raw materials have been prepared.
The state also will streamline the permit process for plant construction.
"For applications that meet requirements, a special team will fast-track the granting of production licenses in the shortest amount of time," Gan Lin, deputy chief of the State Administration for Market Regulation, told reporters Monday.
China's Hubei Province, ground zero for the coronavirus outbreak, faces a severe shortage of protective suits and N95 masks worn by doctors and nurses.
China possesses the largest capacity for mask production, at 20 million units per day. But factories sat idle during the extended Lunar New Year break, which ended Sunday, and workers who traveled for family reunions were prevented from returning due to the epidemic.
Those factors reportedly have stalled factory utilization at 60% to 70%. To boost supplies of medical gear, the government aims to raise the utilization rate of existing equipment and add production capacity.
China's manufacturing capacity glut, especially involving raw materials, has lowered the efficiency of the national economy. Starting in 2016, the country has worked to scrap redundant capacity, primarily in steel and coal. The policy later was expanded to glass and cement manufacturers, as well as to coal-fired power plants.
