Corona: Provincial partnerships with China improve access to protective masks

WNM | Oct 15, 2020 at 9:55 AM
Protective masks (Markus Winkler from Pixabay)

KIEL, October 15 (WNM/Institut für Weltwirtschaft/Mathias Rauck) – Cultivating relationships with China pays off. For example, town and province twinning, close business relations, or supporting the country in their own fight against the Corona pandemic at the beginning of the year. Countries with one or more of these connections have had clear advantages in supplying protective masks and other scarce critical medical supplies during the global corona outbreak in spring. This applies to both commercial exports and Chinese aid supplies. A city or province partnership with China paid off in a doubling of aid deliveries.

This emerges from a recent Kiel Policy Brief, in which the authors compare the quantities and prices of critical medical goods in March and April this year and last year.

”The data show the extraordinarily important role of personal relations in the Chinese culture, the so-called guanxi, whether on economic or on political level,” said Fuchs.

According to the study, the 15 largest importers of critical medical goods include not only heavily affected and populous countries such as the USA, Italy, and Spain, but also numerous countries with relatively low infection and death rates, such as Japan, Korea, Singapore, Malaysia, and Germany. At the same time, Chinese companies took advantage of the high demand and willingness to pay in the industrialized countries to push through price increases, some of them drastic.

European countries had to accept the highest price increases for face masks. In contrast, imported volumes rose relatively most strongly in Russia and neighboring Asian countries. The prices for protective masks from China for Germany, France, and Spain increased by around twelve times, for Italy by almost 16 times. The imported quantities more than doubled; in Italy, they tripled.

In contrast, the volume of imported masks increased sixfold in Russia, fivefold in Singapore, three and a half times in Malaysia, and around two and a half times in Japan. All four countries were barely affected by the corona pandemic in March and April and had to accept less drastic price increases than Germany or Italy, around five times higher and Russia eight times higher.

Source: Kiel Policy Brief