PPE Sourcing Challenges from China

By Louis Hsiao, 3/27/20

A lot of eyes have been looking to China to supply PPE (Personal Protective Equipment) to
help combat the urgent need for masks and other protective gear. One of my China contacts
had a conversation with his close friend employed by the Chinese government branch in
charge of medical supply distribution and certification (kind of like our FDA). It helped me
understand the challenges about PPE supply from China.

If there are so many factories producing PPE in China now, why is it hard
to get supply to the US?

Before this past Chinese New Year, China was just experiencing their rapid demand for PPE
as they struggled with the Coronavirus. There were limited number of factories in China that
have been producing certified Hospital Grade PPE up through February 2020. Supply was
low and demand was high. After they came back in February, over 10,000 companies
registered to produce PPE and many mask companies were born. However, they were only
allowed to produce Commercial Grade masks and supplies as it takes a long time to be
officially tested and certified by the government to produce Hospital Grade PPE.

What's the difference between Commercial Grade and Hospital Grade?

Hospital Grade masks (PPE) are carefully regulated by the Chinese government with regards
to manufacturing and distribution. Their stock material and sterilization process is carefully
controlled for use in the medical field (as you would expect). The process is slow and
expensive which is why a legit N95 mask costs $4-$6 ea.

It takes a long time for a factory to be authorized by the government to produce Hospital
Grade equipment. Hospital Grade equipment is still in rather short supply in China and
no Hospital Grade products from sanctioned Chinese factories are currently allowed for direct
export into the US. (However, I’m told there are “unofficial” ways of obtaining Hospital Grade
PPE – at a price). If anyone has been receiving PPE from China recently, it is doubtful it
is Hospital Grade. CA Gov. Newsom is claiming a shipment of millions of masks and other
PPE arriving shortly from China(?), but I'm curious what grade he is receiving.

A large part of this is POLITICAL due to our government’s recent trade challenges with the
Chinese government. Sadly, surgical grade medical supplies are being used as a bargaining
chip in US/China relations.

Commercial Grade products are readily available in large quantities from. Commercial
Grade masks, for example, don't have the same sterilization process or filtration effectiveness
as the Hospital Grade Masks. They are relatively inexpensive because there are 10,000+
factories in China outputting hundreds of thousands of masks each day. They are not as
restricted by the same export regulations. However, with a surge in worldwide demand,
pricing and availability is fluctuating daily.

But what if my factory says they are FDA certified?

FDA certification just means the factory has passed a set of requirements set forth by the FDA
(or other international agencies). It definitely gives you peace of mind knowing you are
working with a legit company. However, I've been warned that forged certificates have been
popping up in China as well along with the 10,000 new registered companies. Many scams
abound. Be careful, and know whom you are working with.
KN95 vs N95?

KN95 is China's version of the US NIOSH certified N95 mask. I recently released a report by 3M comparing
KN95 (China's version of N95) vs. N95, and their performance is nearly equivalent.

HOWEVER, I just learned recently that there are Hospital Grade and Commercial Grade versions of
the KN95 mask and they don't have identical performance specs (not confusing at all!). One of my
suppliers cut open a KN95 and compared it to a 3M N95 (Hospital Grade) and the 3M mask used
significantly thicker material. He also said it was much easier to breath through the KN95. I was
surprised to hear this considering they are supposed to perform identically. Obviously, he cut open
a Commercial Grade KN95.

So what does this mean?

I've worked very hard this week to hopefully establish a trusted supply chain to legitimate PPE factories in
China to support our doctors and nurses in need. I've received several inquiries for several products from
various groups. I recognize the urgency in all this to deliver goods that are in short supply. Bottom line
is, KNOW WHAT YOU ARE GETTING.

I feel good about my suppliers in China, especially being honest with me about the supply and the limitations.
I'm discouraged (for now) that we cannot readily provide Hospital Grade PPE, but only Commercial
Grade.

There is still a high demand for Commercial Grade PPE as well and that is all we can provide until
government (both China and US) regulations change. It's got to be better than what people are making at
home (no offense to the DIY-ers). I just want to be clear to any potential buyers of exactly what they are
getting. Delivering a false sense of security has health consequences here.

I've asked for sample masks, face shields, thermometers, and goggles from my vendors so we can test them,
touch them, feel them, etc so buyers are comfortable knowing what they are getting, All our factories are
established and have FDA or CE certification (legitimate) for most items. I'm hoping to hook up with a local
doctor or HCW dealing with the Coronavirus to get their opinion on the quality of our supplies. Only then will I
feel comfortable offering these to the masses. I also want to validate that there will be no issues releasing
these products from US Customs once it arrives.

I'm expecting the samples to arrive next week (4/3/20) and hope to have validation soon afterwards. If you
know of a local Palo Alto / Mt View doctor on the front lines willing to spend a few minutes with me to help
validate my samples, please let me know. My Chinese suppliers tell me everything is legit, but it would be
good to get a US doctor's validation as well.

This is what I’ve learned, for now. If any of you have anything further to share, please do.

Stay safe, be well, and create solutions!

About the Author:

Louis Hsiao is the founder of Concept Designs Inc., a Point-of-Purchase design company located in Palo Alto, CA.

He is a graduate of the Master’s Program in Product Design from Stanford University and also has an undergraduate degree in
Mechanical Engineering and Material’s Science from UC Berkeley.

He has been working closely with China suppliers for his work with Concept Designs for over 10 years. He has been trying to
create a trusted supply chain with his manufacturing partners from China for much needed PPE.

Email: louis@popconcepts.com cell: 650 823-9662