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States And Hospitals Are Sourcing Their Own PPE From China

AILSA CHANG, HOST:

The shortage of personal protective equipment - that is, masks, gloves and other disposable gear - has forced a lot of American hospitals and health care workers to fend for themselves. People who have never given much thought to where supplies come from are now looking for connections to manufacturers in China. NPR's John Ruwitch and Martin Kaste have been following all of this and join us now.

Hey, guys.

MARTIN KASTE, BYLINE: Hi.

JOHN RUWITCH, BYLINE: Hi there.

CHANG: Hi. Martin, I want to start with you on the American side of things. What kinds of people and groups over here are you seeing getting into the import business?

KASTE: Well, we've all heard the stories about governors working the phones, trying to call their CEO friends, looking for connections - for import connections in China. But smaller groups are doing it, too, even some individual doctors and certainly hospitals. It's pretty much anybody who's decided they can't necessarily count on the feds or the states to come through in time with some of the stuff that they really have to have. Here in Washington state, the State Hospital Association has actually gotten into the import business. They've been - they had a trial run importing 300,000 surgical masks just to see if it would work. I caught up with Cassie Sauer, who runs that association, just as she was arriving at the warehouse here south of Seattle, where I am, to inspect her first shipment of imported masks.

CASSIE SAUER: We have never imported anything. You know, we actually brought a Chinese translator with us to read all the labels on the box. We opened up about 10% of the cartons to make sure they were all the same, and they were. So we cut one up and made sure it was three-ply, and it is. We poured water into another one to make sure the water didn't go through, and it didn't. And we're just thrilled that it's here.

CHANG: Just thrilled - OK, so this is working, then - to just go to China and get your own supplies.

KASTE: Well, so far, she's pretty happy. They've imported another 300,000 or so since then. But she says, you know, this is a stressful process for people who aren't in this business. There's some financial risk here. You know, she really wishes there were more of a unified national American purchasing effort here on the China side. For one thing, you know, she has no idea if her orders for masks are somehow conflicting with Washington state's effort to buy the same masks.

Rowland Thompson is helping her with these purchases. He's in - his day job is a state-level lobbyist in Olympia, but now he's kind of dived into this new world of imports. He's learning this business on the fly because he has some contacts in China, and he says those contacts are telling him that the competition in China is just intense.

ROWLAND THOMPSON: There are all sorts of people in China that say that they represent various state governments, various city governments, various hospital organizations. So we're scrambling around to all the manufacturers we can find, but we're paying three and four times as much.

CHANG: Ouch, three or four times as much - so they're not getting bargains over there. I want to turn to John on that. I mean, you've lived in China. You've covered the economy there. Does what you're hearing from Martin ring true for you?

RUWITCH: Yeah, it does. And three or four times - I'll tell you, it may not be such a horrible deal, frankly. I've heard some...

CHANG: Really?

RUWITCH: ...You know, quotes. Oh, yeah - eight times, 10 times what they would normally be...

CHANG: Wow.

RUWITCH: ...For, you know, everything from face masks to ventilators, other equipment. You know, pretty much everyone with any kind of manufacturing and sourcing experience in China that I've talked to and, sometimes, people with just general business connections in China have been getting calls on this. You know, one contact of mine got a call from his college roommate who wanted help finding masks.

CHANG: (Laughter).

RUWITCH: People are just looking for any kind of angle or in, right? And the competition...

CHANG: Yeah.

RUWITCH: ...Is fierce. And we've heard examples of, you know, orders as big as a million N95 face masks just being rerouted to the highest bidder at the last minute and other deals collapsing because payments weren't made quickly enough, right? So - and remember; it's not just American states and groups going up against each other. I mean, they're going up against the world here and, sometimes, more centralized or better coordinated efforts.

CHANG: Well, on that front, I mean, what about the Chinese government? Are they helping? Or are they getting in the way in all of this?

RUWITCH: Yeah. There've been some hurdles and backlogs, but from what I'm told, China seems to be really doing what it can to help. I mean, it's a big business opportunity at the end of the day, right? One thing that's caused some issues is that the rules in China have been changing. China got some bad press about substandard PPE that had been sent to Europe, and so they've been tightening export regulations to try to ensure, you know, higher standard of quality. And those higher standards have meant some bureaucratic challenges just to comply with the letter of the law, you know, even on things as small as labeling. An old businessman who was sourcing masks in Dongguan in southern China had to actually send people down to a factory there with box cutters to slice off certain words from packaging just to ship them.

CHANG: Wow. And then what? Did they get the boxes out?

RUWITCH: They did. They did but only after passing an inspection and then a final hurdle, which was freight, which has become a big issue here and is increasingly difficult. I mean, a boat is too slow for this, right? Hospitals need this stuff ASAP. But because of the pandemic, there are very few commercial flights between China and the U.S. right now, right?

CHANG: Yeah.

RUWITCH: And a big portion of the international airfreight - right? - typically rides in the belly of a commercial flight. But there's no space now, and so it's more expensive. So even if you can find the products you want in China, even if you can pay for them, even if you meet all the regulatory requirements, your boxes still might end up sitting in a warehouse, just waiting for space on a plane.

CHANG: Geez, what a logistical nightmare - that was NPR's John Ruwitch in the San Francisco Bay area and Martin Kaste in Seattle.

Thanks to both of you.

KASTE: You're welcome, Ailsa. Transcript provided by NPR, Copyright NPR.

Hey, thanks for reading.
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