Unmasked: the quality dangers in China’s new coronavirus-induced boom industry

In the eastern Chinese province of Zhejiang, a sock manufacturer sensed an opportunity in February when the country was in the depths of the coronavirus epidemic.

The entrepreneur from Jiaxing decided to get into the business of making medical masks but when he tried to buy the machinery he discovered that he was not alone.

“There were already too many buyers,” he said, declining to be named.

“So we ended up buying a machine that is designed to produce other items instead of masks. They needed to modify it into a mask-making one. So we waited for about a month before it finally arrived in late March.

“With only one machine now, our company can only produce 40,000 to 50,000 masks a day. But I am afraid to invest more as the market now is just so chaotic.”

Mask making is a booming industry in China as countries around the world scramble to source supplies of personal protective equipment for health workers treating the rising number of coronavirus patients. In addition, the World Health Organisation has reversed course and now supports government initiatives that require or encourage the public wearing of masks.

But the rush to capitalise has exposed quality problems for both importers and exporters.

China is now the world’s biggest manufacturer and exporter of masks for medical, anti-pollution and industrial protection uses, with around 20,000 producers and distributors who together account for about half of the world’s total production, according to Shenzhen-based Forward Industry Research Institute, a major Chinese market research consultancy.

It’s a lucrative business. Communist Party mouthpiece People’s Daily quoted one industry player as saying that one tonne of non-woven filter material known as meltblown fabric can make one million surgical masks. If the fabric could be bought for about 20,000 yuan (US$2,840) per tonne, each mask would cost only 0.2 yuan in material. Even after labour and logistics, there would still be good profits to be made, with the masks selling for 4 yuan in Beijing or 3 yuan in Shanghai, according to the report.

As a result, companies that would otherwise be making bandages, textiles, and even lighting have refitted factories and equipment to make masks.

But the flood of new entrants into the industry to meet this demand has raised quality concerns,

with most manufacturers not certified to export to the European Union or the United States.

In Jiaxing, the sock-turned-mask producer said his company could meet KN95 standards, a Chinese standard close to N95, which is designed to filter out 95 per cent of airborne particles.

N95 masks are recommended for health workers to protect against Sars-CoV-2, the coronavirus that causes the disease Covid-19.

KN95, the Chinese standard, also filters out 95 per cent of airborne particles but it is not classified as medical-grade and their production is not required to meet medical device production regulations.

The businessman said he opted to make non-medical grade KN95 masks as the “cleanroom” requirements were less stringent.

Medical-grade masks have to be made in a dust and bacteria-free environment that meets a specific cleanroom standard known as class 100,000 while non-surgical KN95 PPE can be made in a cleanroom of a lower standard, according to the State Administration for Industry and Commerce.

KN95 masks may also not protect against droplets, one way in which the coronavirus is transmitted, according to a guide by the China Association of Medical Equipment.

Only around 1,500 companies in China are qualified to make medical-grade masks that meet standards set by the National Medical Products Administration.

These manufacturers need at least three things: a supply of the right fabric, mask making and sterilisation machines, and a cleanroom where the number and size of particles are limited within specified levels.

But while many of those new mask makers had the equipment, the fabrics they used were often substandard, industry insiders said.

“Companies that used to produce lamps made some quick renovation to their workshops and started making masks. Do you think the quality is guaranteed?” a Hangzhou-based lighting exporter said.

China said confusion over the distinction between N95 and KN95 was the reason behind the Netherlands’ recall late last month of 600,000 KN95 masks shipped from China.

The Dutch health ministry said that they did not fit well and the filters did not function properly after feedback from hospital workers who were given these masks to wear.

Chinese foreign ministry spokeswoman Hua Chunying said the Chinese manufacturer who exported the masks told the Dutch procurement agent before shipping that the product was “non-surgical masks”.

But she did not address why the fit and filters did not work properly as should have been required by the Chinese quality standard even if it was not medical-grade.

China has sought to bridge the gap in quality. On Friday, Chinese customs authorities said that 11 medical products, including masks, test kits and gowns, for export would be subject to inspection to strengthen quality control.

Beijing also required manufacturers of surgical masks, test kits and other medical equipment for export to have permits to sell their products within China from March 31, regardless of whether they were certified to sell in Europe or the US.

These measures were also introduced to rein in fraudulent practices by some Chinese exporters, who forged accreditation so they could sell masks. There have been reports of the CE mark, an accreditation for products marketed in the EU, being sold to uncertified manufacturers.

“Problems have appeared in the quality accreditation of some exported products … The State Administration for Market Regulation is monitoring accreditation agencies and will crackdown on illegal cases,” Liu Weijun, head of the administration’s certification regulation department, said early this month.

“Take last year for example, we have investigated 87 certification agents that breached regulations, which were 15 per cent of the total, and five were stripped of their licences to operate.”

The main reasons for fraudulent accreditation are the cost and time involved. For example, a manufacturing audit to qualify for a CE mark for medical devices costs at least €70,000 (US$76,500) and takes five to eight months, according to multinational certification firm SGS.

A saleswoman for a Chinese branch of SGS said that they have received more inquiries from domestic mask makers about accreditation for the EU within the past two months, but that meant they were still in the early stages of obtaining the CE mark.

This leaves a small pool of established medical equipment makers in China who have legitimate accreditation for export. And they are now inundated with orders.

Shenzhen-listed Selen Science and Technology is one of the country’s largest EU and US-accredited manufacturers of masks and is working on similar certification for other countries.

It has been running its production line in Suzhou in eastern China around the clock since January to address the domestic demand, according to stock market filings and media reports.

Since March it has opened a new mask production line and has expanded capacity on all existing plants. The trading of its stock was halted when its price rose and triggered the circuit breaker of 5 per cent over two consecutive trading days.

“Orders from overseas have grown. Some of our plants are working three shifts a day,” a Selen spokesman said.

For one Jiangsu manufacturer of meltblown fabric, the overwhelming demand for the company’s product has been a sudden, bumpy ride.

“We’re not prepared to be in the middle of this perfect storm.”