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Foreign-trade businesses adopt survival tactics

By Hu Yuanyuan | China Daily Global | Updated: 2020-04-29 09:24
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Employees at a plant in Nanchang, Jiangxi province, produce face masks for export to Japan. [Photo by Hu Guolin / For China Daily]

Face mask business

For Pan, switching to face masks business looked to be the easiest option, due to the export prospects. However, after spending more than one month on due diligence work involving this business, he finally gave up.

"Almost everyone I know is doing such business and almost every factory I know is switching to producing face mask machines ... The target is quite clear-to make a quick profit for two to three months," Pan said. "Many of my competitors have switched to this business, but I think it's a crazy game and I see huge potential risks."

The face mask industry, which used to be relatively small, has become key since the outbreak emerged. Machines to make the masks, which used to cost between 100,000 yuan and 200,000 yuan each, are now priced at between 1 million yuan and 1.5 million yuan.

"Even though you pay in advance, you will probably find that the machine you have ordered has been sold to another buyer for a higher price," Pan said.

The price of the drums used to print "KN95" on masks has also risen from 2,000 yuan before the outbreak to about 50,000 yuan, he said. "All the foreign-trade rules we used to follow are now redundant."

Pan said that unless a potential buyer is prepared to stand outside the main gate at a face mask factory all day, he or she is highly unlikely to obtain masks, even though payment has been made in advance.

"Despite being a regular customer at the plant, you can probably only obtain one-tenth of the order you have placed... To ensure full delivery of the masks they need, overseas buyers will find more suppliers and order far more masks than they really require."

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