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IHS Markit Report Explores China's Role as Major Producer of Medical Supplies

March 27, 2020
As the U.S. scrambles for resources in COVID-19 response, it underscores importance of international trade for medical supplies.
In this IHS Markit report, Gustav Ando, the company's head of Life Sciences and Industry Services, offers new data on the role that China plays as a major global manufacturer of medical supplies. 

According to new IHS Markit data, the United States’ shortage of medical supplies is being exacerbated by trade disruptions from the COVID-19 epidemic. On a volume basis China accounted for over one-third (34%) of U.S. imports of critical medical supplies in 2019. The medical supply category includes surgical and medical gloves, protective gear and masks, medical and surgical instruments and ventilators.

There is a major risk that the disruptions of the global medical supply chain will hinder the ability to respond effectively to the COVID-19 pandemic, at a time when both the U.S. and global healthcare systems are racing to ensure the capacity needed to combat the virus.

According to the latest annual trade data:

  • With $14 billion China is the largest global exporter of medical supplies;
  • U.S. annual imports of medical supplies from China stood at $1.1 bn entering 2020, 18% of all medical supplies imports, equating to around 4.8% of the total U.S. medical supply market;
  • China is only slightly behind medical supply imports from Mexico which stood at $1.3 billion in 2019;
  • Germany is in third place with around $830 million worth of exports to the U.S.

Lack of access to foreign supplies is hindering the U.S. healthcare system’s response as demand surges in the face of the COVID-19 pandemic.

So far Mexico has taken few government measures to prevent the spread and appears unprepared compared to other countries. If the epidemic does take hold, it will place further strain on the production and supply for medical goods imported from the United States’ southern neighbor.

At the same time, many countries are shutting down their borders on exports of medical supplies and pharmaceutical products to concentrate on the surge in domestic demand as COVID-19 works its way around the world.

The disruption of global trade in medical supplies will be a setback for the global collaboration necessary to deal with a deadly global epidemic.

There’s going to be a shortfall in medical supplies, despite the effort by the U.S. and other countries to curtail the impact with a major ramp up in domestic production. Because of the return of Chinese industrial production, and the conversion of many companies away from their traditional businesses to the production of medical supplies, China is becoming the go-to source for other countries in desperate need of supplies.

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