WASHINGTON/GENEVA -- The world's reliance on Chinese personal protective equipment has grown sharply as the country boosts exports to meet demand, even as nations seek to increase domestic production and diversify sources.
China supplied 83% of the four major types of PPE that medical staff wear to prevent infections -- masks, gowns, protective clothing and glasses -- in terms of import value in May, according to the latest United Nations trade statistics. The figure grew sharply from 59% in January. In addition to stronger demand as COVID-19 cases grew, shipping costs rose as the gear was increasingly transported by air.
Global trade in medical masks used by doctors and nurses grew from $900 million in January to $9.2 billion in May. China was the source of 96% of Japan's imports in May, up 16 percentage points over four months. This figure rose 20 points to 92% in the U.S. and surged 45 points to 93% in the European Union.
The U.S., EU and Japan received 80-90% of imported gowns from China in May, up from 40-60% in January. China supplied 73% of Japan's imports of protective glasses in May, down 2 points from January but still at a high level.
Dependence on China grew as demand for PPE increased sharply. Nations imported more from China while curbing exports. The U.S. has restricted exports of PPE since April while lifting tariffs on Chinese PPE as a special measure.
Countries around the world have been ramping up domestic production and diversifying sources considering China's track record of leveraging trade in foreign relations, such as its restriction on shipments of rare-earth minerals to Japan over a territorial dispute. Former U.S. Vice President Joe Biden, the Democratic presidential candidate, has made a campaign promise to produce necessary medical products and protective gear domestically.
The U.S. has been scrambling to boost domestic production, such as by ordering 3M to ramp up output of N95 respirator masks under the Defense Production Act of 1950. But quickly curtailing the heavy reliance on China will be difficult. And there has been a lack of coordination as states move to procure cheap Chinese goods on their own.
"Things are certainly better" compared with when the pandemic broke out, said Paul Molinaro, who oversees PPE logistics at the World Health Organization, noting that countries have taken steps to increase production. But he added that he is on guard because infections are still growing.
Nations need to increase production and stockpiles to reduce their dependence on a single country and to prepare for a second wave of infections. Molinaro said that with the cooperation of manufacturers, he hopes to be able to supply nations for about a month from stockpiles even if the supply is cut off.
The Japanese government has been supporting domestic manufacturing efforts. It decided on Tuesday to subsidize the construction of domestic production lines for N95 respirators by Koken and San-M Package. Koken will increase its monthly production capacity by more than 600,000 units by January.
Companies including Teijin and Toray are expanding domestic output of gowns. World Co. began production at six domestic plants in May. But many corporations are cautious about spending on new equipment given the risk of a price war due to oversupply down the road.
Additional reporting by Masayuki Kubota in Tokyo