30 March 2020

Should you source ventilators and protective gear from China?

Personal protective equipment

The demand for personal protective equipment (PPE) is pressing, so it may be tempting to respond to that pressure by sourcing Covid -19 related equipment from China. But don’t take that decision without checking your suppliers first, just as you would in less urgent times.

China has recently been granted a certain level of prestige for having apparently beaten COVID-19. Leaving aside the question of whether it deserves this (there is strong evidence that the statistics it has released are deliberately manipulated), it is wrong to assume that all COVID-19 equipment providers coming from China are reliable.

If you are in discussions with a supplier from China, then, before asking us to review a contract or to advise on what sort of approval is required for the product in question, we urge you to perform proper due diligence on the supplier.

Fraudulent entities

This will mean that you don’t waste your time with an unreliable or even fraudulent entity. At the weekend, the Dutch government had to recall 600,000 faulty masks imported from China – the purchase had been made too hastily under pressure.

In particular, that due diligence should include investigation of the factories. It is very common for the contact offering the supplies to be an intermediate entity who will only start trying to obtain the product in question once the purchaser has made an order. It is also common for producers to be incapable of producing quality goods, especially if their previous business was the production of unrelated products.

Even if you order from a supplier in China of several years’ standing, it is possible that orders will not be fulfilled appropriately, due to lack of knowledge, or desperation to make up lost revenue.

Rajeshree Bhojnani, partner in our commercial team, said: “Once you have ascertained that the provider can reliably supply good quality protective equipment, it is still vital to put in place the usual outsourcing protections, such as intellectual property safeguards.”

There are opportunities for outsourcing, but buyers need to be on their guard now more than ever.

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About the Author
Nicolas Groffman, Partner, Head of International Team

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