China seizes factory lines, spurs speculation and fears about second COVID-19 wave

05/27/2020 / By Michael Alexander

The Chinese government has taken control over factory lines producing critical medical equipment and protective gear, according to China-based American traders, stoking fear and speculation over a possible wave of new COVID-19 infections.

New York native Moshe Malamud, who has been doing business in China for well over two decades now, said in an interview with the New York Post that while he was able to export tens of millions of pieces of protective gear to the U.S. at the height of the crisis, doing the same task within the foreseeable future could become more challenging; Chinese suppliers had, in recent weeks, been overwhelmed with bulk orders from the Chinese government.

“I was placing a larger order with one of the bigger distributors and he tells me, ‘I can complete this order but after this we’ve been contracted by the Chinese government to produce 250 million gowns,’” Malamud said, adding that another manufacturer, one that makes thermometers, is experiencing the same thing.

“We hear how China is up and running and the virus is past them, so I asked, ‘What are they ordering 250 million gowns for?’ and of course no one is talking,” Malamud said, in reference to the recent announcement by Chinese expert epidemiologist Qiu Haibo confirming the emergence of new COVID-19 infections in different parts of the country, particularly, the Northeastern provinces of Jilin and Heilongjiang.

Meanwhile, entrepreneur Michael Kule said it has been “very challenging” to get goods out of China, citing the country’s “constantly changing” rules on product exports.

Kule, the founder of Hong Kong-based AFA Sourcing, however, doesn’t believe Chinese authorities are doing it purposefully so as not to get goods to the American public, only that they want to be prioritized.

“If there’s a very good factory making very good products, then they’ll take over. I’ve been involved with a factory that the Chinese government placed 200 million pieces with and now I can’t place any more orders,” Kule said.

Is China hoarding supplies?

Kule and Malamud’s revelations came about a month after two leading American manufacturers based in China reported that Beijing has enacted prohibitions on the export of their goods to other countries, including the United States.

The manufacturers, 3M and Honeywell, said the Chinese government has coerced them into not exporting their products since February — a move that White House adviser Peter Navarro, in a meeting with the media, said is part of Beijing’s plan to “nationalize” the companies.

The IB Times, in an April report, said that Beijing has extended this prohibition to other manufacturers based in China.

In addition to enacting a prohibition on exports, Beijing has also started stockpiling Personal Protective Equipment (PPEs) and other critically needed medical supplies, as shown by official Chinese government data. (Related: Wuhan coronavirus exposing communist China’s monopoly on pharmaceuticals, medical supplies.)

According to official Chinese government records, China imported 2.46 billion pieces of “epidemic prevention and control materials” between January 24 and February 29, with the supplies’ value pegged at nearly 1.2 billion USD.

“Data from China’s own customs agency points to an attempt to corner the world market in PPE like gloves, goggles, and masks through massive increased purchases — even as China, the world’s largest PPE manufacturer, was restricting exports,” an unnamed White House official said in an interview with The Post.

Jenna Ellis, a senior legal adviser to President Donald Trump’s re-election campaign, said China’s actions are comparable to murder.

“People are dying. When you have intentional, cold-blooded, premeditated action like you have with China, this would be considered first-degree murder,” Ellis said, adding that some of the options under consideration include filing a complaint with the European Court of Human Rights and the United Nations.

This revelation was soon followed by a report from the U.S. Department of Homeland Security, which accused China of hiding the severity of the Wuhan coronavirus during the early stages of the pandemic in order to hoard medical supplies.

The report, released earlier this month, noted that Beijing “intentionally concealed the severity” of COVID-19 in early January in a bid to organize sufficient shipments of medical supplies to help Chinese citizens respond effectively to the pandemic.

The document revealed that Chinese officials increased imports and decreased exports of medical supplies during a period in January when they were also downplaying the severity of the disease.

As per the Associated Press report, the analysis was deemed “for official use only” but was not classified.

The Embassy of the People’s Republic of China in the U.S. has since dismissed the report, and described it as a “groundless accusation.”

As of this writing, over 5.6 million people have been infected, while 347,903 have been killed by the COVID-19 pandemic around the world.

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