China’s face mask industry under scrutiny as pollution worsens

China’s face mask industry under scrutiny as pollution worsens

4:58am EDT

By Grace Li

HONG KONG (Reuters) – Chinese citizens are feverishly snapping up face masks as worsening air pollution fuels a multi-million dollar industry where many products fail to provide even basic protection, drawing calls for better oversight and standards.

The country’s worsening air quality is at the top of the list of concerns of China’s stability-obsessed leaders, anxious to douse potential unrest as a more affluent urban population turns against a growth-at-all-costs economic model that has poisoned much of the country’s air, water and soil.

Authorities have invested billions in various projects to fight pollution, but none so far has solved the problems caused by cars, coal-burning power plants and outdated factories that spew millions of tons of toxins into the air.

It is estimated that air pollution in particular causes an estimated 350,000 to 500,000 premature deaths in China every year, according to an article in the medical journal “The Lancet” co-authored by China’s former health minister, Chen Zhu.

Face masks have become the norm for many city residents, although only nine out of 37 types tested recently by the China Consumers Association met required standards in terms of filtering particulate matter and enabling easy breathing.

The most expensive, priced at 199 yuan ($32.15), was no better than one of the cheapest, a disposable mask that costs 1 yuan, the association said in a report on the tests.

“The vast majority of face masks on the market give no protection against PM2.5, even if the manufacturers claim they do,” said Lei Limin, vice chairman of the China Textile Commerce Association, referring to the small particulates that pose the greatest risk to human health because they easily pass into the lungs.

Lei said his group is pushing for a national standard for anti-smog face masks, echoing calls last week by the China Consumers Association.

Face masks in China have traditionally been categorized as personal protective equipment mainly used for medical or industrial purposes. The country has no quality standards for face masks for personal use, despite the surge in demand.

Last year, consumers on the country’s biggest online e-commerce site, Taobao, spent 870 million yuan ($140 million) on anti-smog goods like face masks and air purifiers.

Taobao, owned by Alibaba Group Holding Ltd, saw a 181 percent increase in the number of people who bought face masks compared with the previous year.

“People are looking for anything that can really help them, that can help reduce any kind of health risk as a result of the pollution,” said James Roy, an associate principal at Shanghai-based China Market Research Group.

FACE MASK VILLAGE

Local media has recently questioned the effectiveness of some masks, with state broadcaster China Central Television (CCTV) targeting Dadian, a village in the eastern province of Shandong, where 300 workshops supply 80 percent of the country’s ordinary face masks.

Dadian saw face mask output value more than triple from 350 million yuan in 2007 to 1.1 billion yuan in 2012, when the village produced 900 million masks.

The CCTV report said some workshops in Dadian had been producing cotton masks with filters in them. The masks were then sold to some companies that claimed they protected people against the effects of pollution. A workshop owner quoted in the report said, however, that the filters might not work.

The masks were not effective against PM2.5 particles, the CCTV report said.

Jiang Xiubin, who owns the BinHai Face Mask factory and who is head of the Dadian face mask association, said the village only produces ordinary face masks, not anti-smog ones.

Asked if the producers would consider upgrading their masks to address people’s concerns about air pollution, Jiang said that was not yet part of the plan.

 

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Kee Koon Boon (“KB”) is the co-founder and director of HERO Investment Management which provides specialized fund management and investment advisory services to the ARCHEA Asia HERO Innovators Fund (www.heroinnovator.com), the only Asian SMID-cap tech-focused fund in the industry. KB is an internationally featured investor rooted in the principles of value investing for over a decade as a fund manager and analyst in the Asian capital markets who started his career at a boutique hedge fund in Singapore where he was with the firm since 2002 and was also part of the core investment committee in significantly outperforming the index in the 10-year-plus-old flagship Asian fund. He was also the portfolio manager for Asia-Pacific equities at Korea’s largest mutual fund company. Prior to setting up the H.E.R.O. Innovators Fund, KB was the Chief Investment Officer & CEO of a Singapore Registered Fund Management Company (RFMC) where he is responsible for listed Asian equity investments. KB had taught accounting at the Singapore Management University (SMU) as a faculty member and also pioneered the 15-week course on Accounting Fraud in Asia as an official module at SMU. KB remains grateful and honored to be invited by Singapore’s financial regulator Monetary Authority of Singapore (MAS) to present to their top management team about implementing a world’s first fact-based forward-looking fraud detection framework to bring about benefits for the capital markets in Singapore and for the public and investment community. KB also served the community in sharing his insights in writing articles about value investing and corporate governance in the media that include Business Times, Straits Times, Jakarta Post, Manual of Ideas, Investopedia, TedXWallStreet. He had also presented in top investment, banking and finance conferences in America, Italy, Sydney, Cape Town, HK, China. He has trained CEOs, entrepreneurs, CFOs, management executives in business strategy & business model innovation in Singapore, HK and China.

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