The Liu family factory has been making diapers and baby products in the Chinese city of Quanzhou for over 10 years, but in February, for the first time, it started making face masks, as demand soared spectacularly due to the coronavirus outbreak. The business – which employs 100 people in the Southeastern Fujian province – has added two production lines to make up to 200,000 masks a day.

And while the decision was primarily commercial, “encouragement” from the Chinese government – in the form of subsidies, lower taxes, interest-free loans, fast-track approvals for expansion and help to alleviate labour shortages – made the decision an obvious one, said Mr Liu who preferred only to give his family name.

“The government is advocating an expansion in production,” Liu said. “With faster approvals, producers need to prioritise the government’s needs over exports.”

The factory is one of thousands of refitted pop-ups around China making masks and other protective equipment for the first time, part of a massive industrial drive to respond to the spread of the coronavirus. Before the outbreak, China already made about half the world’s supply of masks, at a rate of 20 million units a day. That rose to 116 million as of February 29, according to China’s state planning agency, a mix of disposable and high-end masks like the American-designed N95 model worn by President Xi Jinping on his trip on Tuesday to Wuhan, the epicentre of the outbreak.

This exponential jump is the result of a wartime-like shift in industrial policy, with Beijing directing its powerful state-owned enterprises to lead the nationwide mask-making effort, and the country’s sprawling manufacturing engine following their lead.

“For me, this is the big advantage of China, the speed,” said Thomas Schmitz, president of the China branch of Austrian engineering giant Andritz, which has seen a big uptick in demand for its wet wipe-making machines in recent weeks, also due to the virus. “When you need to run, people know how to run, and this is something which has been lost in other countries since their industrial heydays.”

Chinese oil and gas major Sinopec upped production of mask raw materials such as polypropylene and polyvinyl chloride in January. This week, it set up two production lines in Beijing to produce melt-blown non-woven fabric, intended to make four tonnes of the fabric each day, which can then be used to produce 1.2 million N95 respirators or six million surgical masks a day.

The maker of China’s new J-20 stealth fighter jet, Chengdu Aircraft Industry Group, repurposed part of its factory to design a mask production line, according to local media reports. The Sichuan Daily said 258 of the company’s engineers spent three days fast-tracking development of an assembly line with more than 1,200 components.

More than 2,500 companies in China have reportedly started making masks, among them 700 technology companies including iPhone assembler Foxconn and smartphone makers Xiaomi and Oppo, in an extraordinary mobilisation of resources.

The result resembles “the war effort” in the middle of the last century in the United States and western Europe, but arguably no other nation could undergo such a transformation so quickly today. It is a reminder of what can happen in a centrally-planned economy with a strong manufacturing base, but also brings into sharp focus some of the geopolitical issues which have characterised China’s at-times difficult relationship with the rest of the world, particularly the European Union and the US, over the past couple of years.

China’s dominance in manufacturing has become all the more evident as the rest of the world scrambles to shore up their own dwindling medical supplies, leading many to wonder why the world is so dependent on it for vital supplies.

Source: SCMP