The world is experiencing the largest crisis within the existing generations alive. However, China is getting back on track with production. We are proud to announce that because we are a healthy company, we have steadily survived the difficult period in China we have gone through. Although there are still challenging times ahead, we are confident that in these worldwide circumstances we can be even more valuable. We are and stay available to ensure active management of your supply chains and purchasing here in China.
Due to the current situation, issues have arisen which are relevant to the management of your activities in China.
1. China closed entrance to foreigners holding a valid visa
2. Medical masks policy of the government
3. Customs export strong enforcement
4. Quality of products in danger
5. Extension of delivery times
6. Demand falls at factories, difficult times
7. Limited capacity of international air-freight
8. China is eager to develop BRI train lines to Europe
1. China closed entrance to foreigners holding a valid visa
The government have since 28th of March enforced a new regulation in which all foreigners with current temporary visas, except special visas, will be not permitted entrance into the country anymore. Temporary residence, business visas or similar are included in this regulation. All foreigners that entered China before the 28th of March with valid visas will stay valid as long as they stay in China. Practically this means that fact the visa’s of foreigners that didn’t arrive in China before the 28th of March lost their right to enter the country with their current visas.
This caused many foreigners can not visit their business partners or factories in China based on their current applied visa’s. It is possible to apply for a new visa at the Chinese embassies worldwide. However, we expect that it will be more difficult to apply for visas due to the virus outbreak in foreign countries.
When you are not able to visit China, we as your representative office can help to execute the required work here in China. We can be used as your employees as an extension of your company here in China.
Source: https://www.fmprc.gov.cn/web/wjbxw_673019/t1761858.shtml (CN)
Source: https://www.fmprc.gov.cn/mfa_eng/zxxx_662805/t1761867.shtml
2. Medical masks policy of the government
Since 31st March, the government have issued a new regulation in order to ensure quality export of medical supplies. These regulations require companies that export medical standard products to being registered at the National Medical Products Administration (Chinese). If a factory of medical suppliers has not been registered at this administrative organization, they are not allowed to export their products. In addition, if the company is registered at this administration body, the exporting factory needs to provide an official letter in which it clarifies that the products exported are in full reaching and is in compliance with the standards of the destination country.
These regulations have caused that on one hand the offer and supply of medical equipment have been decreased. At the other hand, it ensures the exporting quality of the medical suppliers. Medical equipment is at the moment in high demand due to the corona crisis. By these measures, China shows it sees the importance of quality in protecting the lives of the doctors and nurses in the frontline of combatting the virus worldwide.
We can help to verify whether your medical equipment supplier is listed at the administrative body and if the products can be exported for medical use. Contact us and share the information needed to receive a judgement from us.
Update 13-04
The government and customs in China are. ramping up control on quality on medical products. The following rules have been issued to strengthen quality control on medical products for export.
2.1 Custom commodity inspection
The products are inspected by customs before export. Products need to be applied to the customs with the right documents. Products are tested on stated quality standards.
2.2 Health/Medical certificate for manufacturers
Some manufacturers out of our network have received the message of the local government that their factory needs to comply with certain health/medical standards. Based on the information received by these manufacturers, government officials will personally inspect production lines before issuing a certain health certificate.
Based on the above update, it is clear that changes are very fast implemented by the authorities. We can expect multiple changes in policies and regulations in the future. Stay up to date to make sure your exports will not be influenced negatively.
3. Customs export strong enforcement
Due to the new medical and export policy for medical products the customs have been presented by higher positioned officials to handle export. This can cause your shipments with your products being delayed to export or even being refused. As normal protocols are more strictly followed, small mistakes in your packing lists or export documents can cause the return of your shipment. As the government is taking the quality of medical equipment very serious, the regulations are followed strictly. Officials don’t want to make mistakes in these times. Which causes that they also look stricter at the export of any product or product category.
Most of the factories and shipping agents are not aware of their own mistakes. In a normal situation, these mistakes are acceptable. But these times also require more focus on your shipping agents and factories. We can help with making sure all documents are verified and correct before exporting, preventing mistakes as much as possible.
Source: http://www.mofcom.gov.cn/article/b/e/202003/20200302950371.shtml
News source: http://mpa.gd.gov.cn/xwdt/xwfbpt/mtzx/content/post_2965925.html
4. Quality of products in danger
We are managing the purchasing orders at factories for our current clients with a strong focus on quality improvement. What we see in this period is that not all factories reaching the quality standards from before the crisis. Due to the lack of labour or loss of skilled labour, new employees are working for the first time with products. Causing beginner mistakes and management issues. Also, factories are under high pressure to manage their suppliers stricter, as they encounter the same problems.
If your current factories might have a risk to experience the same issue as described above, please contact us. We can help you to ensure quality and execute quality inspections accordingly. With our management, we can make a difference in quality and speed.
5. Extension of delivery times
We experience with multiple purchasing orders that delivery times have sometimes doubled from before the crisis. It is at the moment common seen that factories have a waiting line of customer orders that need to be produced. This is causing trouble for stock levels of products for our clients in sectors which are not heavily hit by the current Corona crisis. In these circumstances, companies can choose to keep the labour availability a little bit lower to ensure full production capacity for a longer period. As the economic forecast is not that positive, we expect this issue staying relevant in the coming period.
For some clients for whom we manage supply chains are encountering the same issue. We are in contact with the factories to speed up lead times. Sometimes this requires that they need to delay an order from another client to give our orders priority. Until now in some cases, we successfully shorted lead-times up to one month. Contact us if we can help to talk to your factories to speed up lead times.
6. Demand falls at factories, difficult times
In the peak of the Corona crisis here in China, the production facilities were stopped and caused a stop in supply. Causing a lack of stock and sellable goods at companies worldwide. Now that the Corona crisis is peaking worldwide, the demand for companies falls. Although certain sectors are doing good business at the moment, generally most sectors are under pressure.
Where difficult economic times rise, certainty and trust can fade. Make sure you protect your interest and quality levels. Protection of IP’s is in these times very important. Also, “trustable” partners can make moves that you don’t expect. At the moment that business becomes difficult, companies have to act and friends don’t exist anymore.
7. Limited capacity of international air-freight
Countries worldwide have grounded almost all airplanes for scheduled passenger flights. Passengers flight playing a key role in the worldwide supply chain as every passenger flight is generally also taking cargo. By the enormous fall in passenger flights, there is also a fall in capacity. Also, due to the medical equipment demand, this capacity is extra under pressure as medicals are currently requested to take the fastest shipping possibilities. Sea freight is no option for this moment. These circumstances result in extremely high rates and can influence your margin. Because of the high demand for airfreight and the lack of capacity, your shipments can also delay significantly. It is an uncertain time, causing trouble for your supply management.
8. China is eager to develop BRI train lines to Europe
Due to the lack of capacity in air-freight, this seems the time for China to push the development and usage of the BRI (Belt and Road Initiative) train line to Europe. At the moment, increasing capacity at the train line will now directly fill up the demand for shipping to Europe for medical equipment and protective materials. It will currently not result in faster shipping duration as the demand is strongly higher than the offer. But taking this opportunity to scale up the train line will create a bigger capacity and further developed infrastructure after the Corona crisis. Which could result in more available, faster and cheaper train shipping possibility after the Corona crisis.