Workers producing face masks at a factory in Shenyang in China's northeastern Liaoning province on April 16.
STR/ AFP / Getty
  • China is currently experiencing a boom of production for medical equipment, in particular masks. The price of basic surgical masks has increased from about 30 cents to 70 cents since the pandemic began.
  • Since the beginning of 2020, 38,000 new companies in China have registered to make or trade face masks. In all of 2019, there were 8,594 new companies.
  • But with more supply and demand, the quality of China's exported masks has proven to be an issue, and scams have taken off, costing several individuals millions of dollars.
  • In a report from the South China Morning Post on April 17, the mask supply and demand boom was called a "wild feeding frenzy," while the founder of a mask inspection company called it "the Wild West."
  • For mores stories go to www.BusinessInsider.co.za.

China is experiencing a mask-making boom due to the novel coronavirus. But quality control has been an issue, and scammers have been using the chaos to rip off would-be overseas purchasers.

The South China Morning Post reported on April 17 that since the beginning of the year 38,000 new companies in China have registered to make or trade face masks. In all of 2019, there were 8,594 new companies.

"We are slap bang in the middle of a gold rush for the year's most sought-after commodities - masks, gloves, thermometers, ventilators, hospital beds, testing kits, hazmat suits, hand sanitiser and goggles - and according to those involved in the scramble, there are no holds barred," the South China Morning Post reported.

Globally, there has been a shortage of masks, which are pieces of necessary personal protective equipment that prevent the spread of the Covid-19 coronavirus. They're particularly important for keeping healthcare workers safe.

China's boom isn't just for masks, but they make up a big part of it since they are a relatively easy commodity to make - they can be produced quickly, and factories can turn a profit after two weeks' production, according to the South China Morning Post. This led to factories that make things like golf balls, vape pens, or car parts to turn to mask production for now.

David Sun, who runs a logistics company in Yiwu, but used his export license to trade medical supplies during the pandemic, told the South China Morning Post: "mask machines are like cash printers" and "many factories manufacturing while waiting for a production license."

The price of basic surgical masks had increased from about 30 cents to 70 cents.

The deluge of new companies, and the wild-west way of operating, has led to problems with quality. In late March, the Netherlands recalled 600,000 coronavirus face masks it imported from China after discovering they were faulty, Business Insider previously reported.

It's also caused people to get ripped off. Dan Harris, the founder of law firm Harris Bricken, told the South China Morning Post he spoke with three people in one day in March who had all lost more than $1 million (R19 million). One US businessman lost $1 million dollars (R19 million) after putting up capital to make masks before the company he wanted to work with disappeared, while another paid about $1 million (R19 million) only to get a delivery of dirty Halloween masks.

Harris also said someone offered him $50,000 (R953,000) for his list of mask stockists, but he refused, saying it was unethical to provide it, and his firm would have lost its bar license.

Fabien Gaussorgues, co-founder of Sofeast, a quality control inspection company in Shenzhen, told the South China Morning Post: "This is the Wild West - the rules are being rewritten every day."

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