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Mon Feb 10, 2020, 07:06 AM

US brands caught over a Chinese barrel

The deadly coronavirus that brewed up in China late last year is understandably scaring the wits out of people worldwide. To contain it, Chinese authorities have “locked down” a good portion of the country. And other nations have either closed their borders or severely restricted entry by Chinese visitors.

But the coronavirus is also causing headaches of a different sort for foreign businessmen. Besides those who sell into the now “locked down” Chinese market, many Western companies depend on Chinese supply chains for vital parts and components or for finished products. Ironically, even US pharmaceutical companies heavily depend on Chinese drug makers to produce their medicines.

Making matters worse, supply chains are far more embedded in the People’s Republic of China – and far more vulnerable – than 17 years ago when the SARS epidemic emerged in China and spread throughout Asia causing widespread disruption, if not panic.

One understands Western executives’ concerns these days. But one doesn’t understand their bafflement.

Since the early 1990’s one watched in awe as America’s best and brightest business minds at companies large and small went all in on the PRC market: Boeing, General Motors, Dell, Microsoft, Walmart, Apple, to name a few.

Now they fret that their exposure to the PRC has put them over a barrel. They’re overexposed.

https://www.asiatimes.com/2020/02/article/western-biz-gets-itself-over-a-chinese-barrel/

I've read that pre-coronavirus China was producing over half the world's face masks. Does the US have the ability to produce face masks and other protective gear for hospitals?

It seems likely that since this is basically textiles, and most textiles and clothing are imported, that production of face masks and protective garments has been shut down in the US.

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Response to Troll2 (Original post)

Mon Feb 10, 2020, 08:14 AM

1. Tough shit for those ''Western companies'' for putting all their eggs in one basket...

"...many Western companies depend on Chinese supply chains for vital parts and components or for finished products. Ironically, even US pharmaceutical companies heavily depend on Chinese drug makers to produce their medicines."

...but it's really a pisser that our FDA allows those drug companies to outsource drug mfg to China, especially given all the crap found in chinese made dog food, baby formula, etc.

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Response to quad489 (Reply #1)

Mon Feb 10, 2020, 08:23 AM

2. My drugs seem to come from India - Dr. Reddy's or Aurobindo

Although it is possible that China does the high-tech part of manufacturing the precursor chemicals and the Indian companies do the compounding and pill manufacturing.

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Response to Troll2 (Reply #2)

Mon Feb 10, 2020, 08:28 AM

3. That's even scarier..........

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Response to Troll2 (Original post)

Mon Feb 10, 2020, 09:50 AM

4. Really at this point

The White House ought to be offering VERY generous terms to repatriate industries.

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Response to Troll2 (Original post)

Mon Feb 10, 2020, 10:28 AM

5. Well as viruses go- the corona virus has been very mild so far!

Unless of course China is typically lying about the number of infected and the number of deaths.

Every year the influenza virus kills close to 30,000 Americans, so the corona virus is mild in comparison.

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Response to nolidad (Reply #5)

Mon Feb 10, 2020, 11:20 AM

6. I have a gut feeling we are not being told the actual extent

At this point.

I don’t trust our media or China’s media. I feel China would prefer that world wide concern is kept at a minimum.

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Response to DDKick (Reply #6)

Thu Feb 13, 2020, 11:16 AM

8. Very true.

China lies even abou t their lying!

It could be much much worse, but even if so- this virus still doesn't match the spread of the annual influenza and the death toll it causes world wide.

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Response to nolidad (Reply #5)

Mon Feb 10, 2020, 11:51 AM

7. Best estimates of the death rate are around 2% of cases.

CDC flu estimates for the US flu season are 21 to 31 million with 12 to 30 thousand deaths. So the US flu death rate is in the neighborhood of 20,000/25,000000 or 0.08%.

If you apply the coronavirus death rate to the US flu case number you get about 500,000 deaths.

But the population is vaccinated for flu and the unvaccinated have some resistance from previous bouts of flu, which accounts for the low number of cases. On the other hand, the US population has no resistance to the 2019 nCov coronavirus. Therefore, if it is really spread as easily as it seems to be in China, we could have a few million deaths.

Luckily, 2019 nCov doesn't seem to be bad at all in most children, most adults recover, but the death rate really goes up for people over 60 and those with preexisting conditions, especially poor immune systems. So the impact will be on seniors, people on cancer chemo, HIV patients, and other chronically ill patients. It will result in a younger and healthier population. Some of our pension systems may become much more solvent as well.

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