SCIO press briefing on centrally administered state-owned enterprises' support for epidemic prevention and control

A press conference was held Tuesday morning to shine light on measures taken by centrally administered state-owned enterprises (SOEs) to support the fight against the COVID-19 epidemic.

China SCIO February 20, 2020

Beijing Youth Daily:

Medical materials such as surgical masks and protective clothing are still in short supply. What have China’s centrally administered SOEs done in terms of production of key medical supplies? What plans have been formulated? Thank you.

Ren Hongbin:

Thank you for your question. Many of you must have recently learned from the media since the COVID-19 outbreak in Hubei started, the demand and supply of surgical masks and protective clothing has remained in a tight balance. Shortages have occurred in a few regions. This has become an important and urgent issue that needs to be addressed immediately and a shared concern to all the people across the country. During the past two weeks, at the request of the CPC Central Committee and the State Council, SASAC and centrally administered SOEs have focused on designated priorities and urgent tasks. We have taken active action to ensure important medical supplies are available.

First, we quickly required and facilitated qualified centrally administered SOEs in switching or expanding production of medical supplies. Before the COVID-19 outbreak, not a single centrally administered SOE produced medical masks or protective suits. As the shortages emerged after the outbreak of the epidemic, we quickly identified the centrally administered SOEs with the capability to produce medical masks and protective suits and launched active mobilization. These enterprises acted quickly and embraced the spirit of "when conditions area ideal, proceed; when conditions are lacking, fix them and then proceed," which was passed down from China’s first generation of oil workers. They soon switched or expanded production of medical supplies. Jihua Group Corporation Limited under Xinxing Cathay International Group is a prime example. Now, its employees are working in shifts around the clock and racing against time to produce medical supplies. Jihua Group normally produces military supplies including uniforms, bedding and clothing. After receiving the order to produce protective clothing, the corporation quickly purchased equipment, trained employees, and shifted its operations to protective suits like in wartime. Recently, I visited a factory affiliated to the corporation in Shijiazhuang City, Hebei Province. I was quite impressed to witness its workshop. Two production lines were running at full speed. One production line was producing winter clothing for the People’s Liberation Army (PLA), and the other was producing medical protective suits, creating a sharp contrast. Jihua Group usually doesn’t produce protective clothing. Thus, starting to produce medical supplies in an emergency was difficult for the corporation. Due to inadequate equipment, employees must pay close attention during the production process and work in shifts around the clock. They didn’t even get a break during the Spring Festival holiday. I was particularly moved when seeing a banner in the workshop, which reads "Let the Party flag fly high over the front line of protective suit production." Every worker seemed completely devoted to their duties. On February 5, Jihua Group could only produce 7,850 protective suits each day. By February 16, its supply capacity exceeded 45,000 suits per day. The latest data I just got this morning shows their daily output remains more than 45,000 suits. Its output now accounts for more than one third of the total production of medical protective suits in the country. Still, the corporation is working to further expand its daily production. Other qualified centrally administered SOEs are also working hard to produce protective clothing. On my way here, I learned that SUMEC Group Corporation, a subsidiary of Sinomach, also began to produce protective suits with output gradually increasing. Another Sinomach subsidiary, CHTC Jiahua Nonwoven Co., Ltd., which normally produces nonwoven fabrics, switched to medical mask production at top speed. As of February 13, the company had launched 11 mask production lines in succession, with a daily production capacity up to 1.1 million masks.

Second, by leveraging their industrial chain advantages, centrally administered SOEs and private enterprises have carried out extensive consultation, made joint contributions, and promoted production capacity expansion together during the difficult time. Friends from the media probably noticed a message on the internet recently: "We have melt-blown fabrics. Who has machines to make them into masks?" The message was from Sinopec. If not for the epidemic, people might never have associate Sinopec with mask production. Sinopec produced melt-blown fabrics, the basic raw material for masks and protective clothing. Polypropylene, a chemical produced by Sinopec and China National Petroleum Corporation (CNPC), serves as the raw material for producing melt-blown fabrics. So, when Sinopec learned of the mask shortage, it immediately began searching for downstream firms capable of producing masks through connections between upstream and downstream firms on the industrial chain. Now, 11 production lines for medical masks have been jointly established by Sinopec and downstream firms, with Sinopec providing the raw materials. By February 16, their total daily output had reached 620,000 masks. And this figure continues growing.

Third, centrally administered SOEs have gone all out to purchase medical supplies from overseas. The role of the three major national procurement platforms ― Sinopharm, China General Technology and China Resources Group ― has been brought into full play. Through these platforms, medical supplies including protective suits, masks, goggles, and gloves were purchased from suppliers both in China and abroad and handed over to the central government for unified allocation. At the same time, 26 centrally administered SOEs tapped into the strength of their overseas branches to increase their procurement of medical supplies abroad. So far, they have donated more than 1.74 million medical masks, 61,800 protective suits, 27,000 pairs of goggles and 348,000 pairs of medical gloves procured from overseas to Hubei Province.

Fourth,R&D of direly needed equipment such as mask machines and plodders has been accelerated. Since the COVID-19 outbreak, demand for protective suits and masks has soared, which caused a shortage of machines for production. To expand production capacity and output, we had to find the solution at the source. That means we need to produce mask machines as well as plodders, which are urgently needed for protective suit production. Sinomach, China General Technology, Aviation Industry Corporation of China, China State Shipbuilding Corporation, and NORINCO Group began performing R&D and production at full speed. Sinomach’s production facilities for masks are expected to reach mass production by the end of February. I received the news yesterday that the first batch of prototypes had been successfully developed. At the same time, preparations for R&D and production of plodders and machines to produce N95 respirators have also begun. Manufacturing will begin as soon as possible to solve the shortage of mask machines and plodders. Thank you.

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