As China contains the COVID-19 pandemic, the country's business operations and industrial activities are on course for a full recovery. On a trip to the southern city of Dongguan, known as "the world's factory", the Global Times found that the city's integrated industrial chains and efficient local government have not only helped the city's economy recovery, but also played a vital role in the global economy via its PPE supplies. For more stories, please scan the QR code.
A face mask production workshop in Dongguan, South China's Guangdong Province on March 25, 2020 Photo: VCG
On the campus of Arun, a consumer electronics factory in Dongguan, South China's Guangdong Province, industrial workers rush to make face masks on a tight production schedule as the world's need for masks soars to irregular levels due to the global COVID-19 outbreak.
Since the pandemic took hold in China in January, Arun, whose major business is developing and producing consumer electronics, including power banks and charging cables, started a new business - face mask production, deputy general manager of the company Sun Defeng told the Global Times in a recent interview.
"In the beginning, the mask production was only for solving our own mask shortage, but since we already had almost everything - raw martials, workshops and skilled workers -we quickly expanded the production capacity to help solve the country and even the world's mask shortages," Sun added.
By September, Arun had already extended its production capacity by several times and operations have been at full capacity ever since, and the demand for masks both domestically and globally is still strong, according to Sun.
"For companies like ours, there is no concept of 'operation recovery', because we never stopped... instead we have been extremely busy trying to keep up with market demand," she said.
Since the pandemic outbreak in January, demand for face masks - an everyday medical item usually used for patients - has seen a sharp increase as many countries try desperately to get enough masks to prevent further spread in their countries, resulting in a global shortage.
According to Yahoo finance, the global market for disposable masks is projected to accelerate at a CAGR of 5.4 percent to reach $28.8 billion by the year 2027. The biggest growth spikes are expected in the years 2020 and 2021 at 396.6 percent and 18.2 percent CAGR respectively.
Faced with such huge demand, especially as the pandemic itself created hurdles for factories' operational recovery, the challenge of how to steadily increase output has become a global headache.
Many factories, including Kinyet, a metal parts producer in Dongguan, turned to face mask manufacturing as the pandemic took hold with the initial purpose of survival. It was only later that they saw their role turn into a socially responsible one in order to solve the global shortage, the Global Times learned.
Many of these companies saw their revenues skyrocket by up to more than 10 times compared with the same period last year. However, as the pandemic put global business operations on hold, what in fact guaranteed their ongoing success was unique to China - Dongguan's integrated industrial and supply chains allowing easy access to raw materials; strong and speedy government support that optimized resource allocation; and the convenient logistical systems that made shipping from the city easy too.
At Arun, from making the initial decision to hitting mass production only took 14 days, according to Sun, adding that "it took only seven more days to gain the medical face mask production certificate, allowing Arun to produce and export medical grade masks."
These application procedures normally take at least six months, but thanks to the temporary 'fast track' policy implemented by the government during this time, Arun got theirs in only three weeks, she said.
"On the day that our newly purchased machines were due to be delivered, government officials told me, 'no matter how late your new machines come, we will send professionals to offer assistance, even if it's at midnight,'" Sun recalled.
Before the pandemic, Zeng Junfu, general manager of KYD, a face mask machine maker in Dongguan, barely interacted with local government, but after the outbreak, he strongly agreed with Sun that a pragmatic government had played a vital role in their success.
"After the outbreak, they (the local government) quickly came to my factory to see what they could do to help increase production capacity. They were so efficient that almost every problem could be solved within two days, which ensured my production capacity," Zeng said.
As the result of these advantages, Arun and KYD were not only able to meet large orders, but also to turn a profit.
"Our revenue last year was about 90 million yuan ($13.25 million), but as of August this year, our revenue had reached more than 600 million yuan, a more than 10 times increase year-on-year," he said.
In addition to the government's support, Dongguan's integrated industrial chains have become indispensable.
"Despite the crazy increase in demand, I can procure every raw material we need in Dongguan to produce face masks," Sun said, adding that "even at the time when melt-blown cloth - a crucial part of surgical masks - was most scarce, we were still able to at least find the raw materials to produce such a cloth.
"I have received many investment invitations from other industrial parks in different cities, but I have never thought about moving out, because Dongguan has the most integrated industrial chains I know of: other places cannot compete," Zeng said.
Without Dongguan's unique advantages, it would be impossible to quickly respond to the government and the markets' requests, according to Zeng, whose company has supplied mask machines to dozens of countries so far.
Ensuring global supply
In reality, Dongguan is just a smaller version of industrial zones across the country; China's strong production capacity and successful prevention measures not only solved its own mask shortage, but helped the world with its increased demand, the entrepreneurs told the Global Times.
Prior to the pandemic, China held a 50 percent share of global surgical mask production, manufacturing close to 20 million face masks daily, Xinhua news agency reported.
According to Chinese Customs, from March 1 to May 17, China exported a huge number of anti-epidemic supplies, including 50.9 billion masks, 216 million protective suits and 81.03 million goggles to support the fight against COVID-19 globally.