Ibuprofen dependence + Economy and Covid

Dear reader,

What happens when important pharmaceuticals are suddenly hard to come by? Germany is currently experiencing this. Fever medication for children is harder to get than usual. Although the shortage is not (yet) caused by delivery problems in the Far East, it can serve as a warning to us, write Christian Domke Seidel and Christiane Kuehl. But they can be a warning to us, write Christian Domke Seidel and Christiane Kuehl. Ibuprofen and paracetamol contain active ingredients that come predominantly from China.

And the situation could get even worse in the coming weeks. Because with the Omicron tsunami currently sweeping across China, many pharmaceuticals are now in short supply there as well. Most of the medicines produced are kept in their own country. Meanwhile, the WHO provides an explanation for the surprisingly fast buildup of the infection wave. The rapid spread of Covid was not caused by the openings at all, but already began to build up before.

German companies in China, on the other hand, have some hope. Their mood may have never been as bad as it was this year. One in two companies will refrain from making any further investments in the People’s Republic in the next two years, or will even leave the country altogether. But at least the relaxations should soon make international travel possible again. And that should help boost the appeal of doing business in and with China.

Your
Felix Lee

Dependence also for ibuprofen and paracetamol

Fever and pain medications for children based on the active ingredients paracetamol or ibuprofen have become in short supply in Germany. The current bottleneck is not caused by problems with shipments from China, but is mainly the result of extreme demand. But the shortages can be seen as a warning shot. After all, Germany’s supply of antipyretics is also dependent on imports. And the most important countries of origin are India and China.

For example, ibuprofen. There are now only six manufacturers of generic ibuprofen worldwide, of which four are located in Asia:

Hubei Biocause and Shandong Xinhua in China,
Solara and IOLPC in India, and
BASF and the SI Group in the USA.

These six companies compress the active ingredient ibuprofen with suitable excipients into a tablet and then package the pills. It is a typical constellation: Fewer manufacturers hold ever larger market shares, also in Asia.

But even the distribution over three countries suggests greater diversity than is actually the case. This is because pill factories in other parts of the world, in turn, source their precursors from a small number of suppliers. “The problem is not that active ingredients come from China and India, rather that they only come from China and India,” says Anna Steinbach, spokeswoman for the Pro Generika association. “We can’t reduce dependence, but we can diversify supply chains more.”

China produces 40 percent of active ingredients

The first problems surfaced at the beginning of the pandemic in Wuhan in early 2020. Biocause is located in the Chinese province of Hubei, which was under lockdown at the time. But China not only produces the finished ibuprofen generics, but also the active ingredient ibuprofen at many sites, which later gets turned into a pill or juice in India or the USA. Chinese active ingredient manufacturers were also affected by lockdowns during the pandemic. As a result, Indian suppliers ran out of base materials. India is therefore also partly dependent on China.

China’s pharmaceutical manufacturing hub is the Yangtze River Delta, which was hit by many local transport restrictions, especially in 2022, due to the strict lockdown in nearby Shanghai. (China.Table reported). Companies were unable to produce for weeks. And what still left production lines for export often did not make it to the Shanghai port or remained stuck there. A huge shipping jam formed off the Yangtze River Delta.

Increased demand in China

Sudden shortages can also be caused by factory accidents in China and India. In 2019, for example, an explosion at Qilu Tianhe Pharmaceutical in Shandong occurred after an accident during welding work. Among other things, the company produces the broad-spectrum antibiotic piperacillin, a type of penicillin. A whopping 85 percent of global demand for penicillin comes from China (China.Table reported). In 2021, a fire had broken out at Tyche Industries in India, which produces the anti-diarrheal agent racecadotril and the anti-depressant agent sertraline.

Furthermore, China needs its own medicines at the moment. Due to the current Omicron wave, demand for pharmaceuticals such as ibuprofen exploded in the country. Cold and fever medicines are sold out in almost all Beijing pharmacies because many people stock up on them in preparation for the Covid tsunami (China.Table reported). A shortage of medicines in China will hardly be beneficial for exports.

Lack of supplies for crises

According to the consulting firm Daxue Consulting in Beijing, China produces around 40 percent of the world’s active pharmaceutical ingredients. About 70 percent of all medications produced in Europe and Japan contain active ingredients made in the People’s Republic. “China and India have done a lot in the past 15 years to become leaders in the production of active ingredients and pharmaceutical precursors,” Steinbach said. “These countries have established conditions under which European manufacturers find it difficult to produce.” According to Pro Generika, only one in six active ingredients is still produced in Europe.

If a manufacturer holding a huge market share is unable to produce, smaller suppliers cannot compensate. “There is no buffer left. If there are bottlenecks because the supply chains are under pressure – because glass or blister packaging is in short supply – then there is no longer a significant number of suppliers who could compensate for this,” explains Anna Steinbach.

Only one in six active ingredients still comes from Europe

The reasons for both the current shortage and the risks of import dependency are the result of decisions made over the past decades. Many affected pharmaceuticals are generics – active ingredients whose patents have expired and that any company is allowed to produce and market under its own brand. The competition between generic manufacturers runs primarily on low prices.

For example, the production of active ingredients for generics has shifted from Europe to Asia over the past 20 years. According to a study by consultancy MundiCare commissioned by Pro Generika, two-thirds of these active ingredients now come from countries like China or India. Christian Domke Seidel/Christiane Kuehl

Zero Covid ends: German companies begin to hope

It has been a terrible year for German companies in China, but after zero-Covid was abandoned, the situation is finally looking up. These are the two key messages presented by the German Chamber of Foreign Trade on Thursday during the presentation of its annual member survey.

First, however, the survey results of 593 member companies paint a grim picture. Business confidence among German companies had fallen to a “historic low,” according to the Chamber. Around one in two companies (49 percent) said that the second-largest economy has lost its appeal compared to other markets since the last survey a year ago.

Only 51 percent of companies still intend to expand their investments in China over the next two years, compared to 71 percent last year – a decrease of 20 percentage points. At the same time, the share of companies considering withdrawing from the Chinese market rose sharply from 4 percent to 10 percent.

Hard winter, improvements expected for the spring

The main reason for the poor sentiment is considered to be zero-Covid. Now this concern has been replaced by worries about the Covid wave (China.Table reported). The Chamber board now expects China’s economy to resume significant growth in the second quarter of next year. The situation over the winter months, on the other hand, is difficult to predict. Much depends on how the rolling Covid wave (China.Table reported) continues to develop.

What is clear is that the virus appears to be spreading rapidly in many cities, with visibly negative effects on the economy. Beijing streets, for example, are virtually deserted. Images of long queues outside hospitals are circulating on social media. There are also pictures of mountains of undelivered packages piled up on roadsides because so many deliverers seem to be sick.

According to Clas Neumann, President of the Shanghai Chamber of Commerce and SAP CEO on site, German companies have not had to halt production due to a lack of employees. However, interruptions in the coming weeks cannot be ruled out.

The chamber board also expressed confidence that the hotel quarantine still in place after arrival in China could soon be dropped. Since China now also has many infections, the rule would no longer make sense. However, flights to China will likely continue to be limited for the time being, as airlines need time to adapt to the new conditions.

Zero-Covid has spoiled the mood

The record frustration observed by the Chamber among companies can primarily be explained by the date the survey was conducted. It was conducted between August 23 and September 21. At that time, there were no signs that any Covid measures would be lifted. And even more so, hardly anyone at the time would have thought it possible for China to drop almost all of its harsh measures virtually overnight. But that is exactly what happened last week.

At the survey’s presentation on Thursday, Neumann admitted that more optimistic results would probably have been recorded by now. Zero-covid left deep scars. But with the measures being lifted, the biggest concern of German companies is now gone. In this year’s survey, 66 percent of chamber members mentioned the pandemic measures as their greatest challenge to operational business.

Accordingly, it was also the main reason for reducing investments or leaving the market altogether. With the now-changed situation, companies may reconsider their previous reluctance to invest in the coming months, Neumann believes.

Now ‘panic about the consequences of opening’

Joerg Wuttke, Head of the European Chamber of Commerce in Beijing, also believes that the economy will be in for a difficult winter. “The panic about the consequences of opening up is paralyzing the country for now,” Wuttke said in an interview with the German business weekly Wirtschaftswoche. The Covid paralysis will last for at least the first quarter, he added.

The fact that the Chinese economy currently still stands on extremely shaky ground was also shown on Thursday by new data from the Beijing statistics office. November retail sales slumped by 5.9 percent year-on-year. Industrial production grew by a meager 2.2 percent year-on-year. Both figures fell well short of analysts’ expectations. Joern Petring

Omicron already widely spread before zero-Covid lifting

According to the World Health Organization (WHO), Omicron infection numbers already surged before China lifted zero-Covid. “The increasingly intense spread happened long before the measures were changed,” Mike Ryan, WHO’s emergency coordinator, said at a news conference in Geneva. According to the statement, the lifting of measures did not trigger the current Covid wave. In fact, zero-Covid failed to contain the virus for quite some time. This was the only way to explain why Omicron has already spread so far across China.

The Covid situation in China is currently difficult to estimate, as the numbers from the Chinese authorities are not reliable. Officially, the number of infected has been falling for two weeks, but unlike in November, testing is no longer being carried out nationwide, and in some cases not at all (China.Table reported). Simultaneously, hospitals report an influx, while authorities urge people to recover from Covid-19 at home if possible. Stores and restaurants in Beijing are closed as large parts of their staff are sick. On social media, companies complain that up to 90 percent of their workforce is sick.

WHO urged the leadership in Beijing to focus on reducing the burden on the health system and speeding up the vaccination of high-risk groups. Chinese health authorities only recently gave the green light for a second booster for citizens over 60 or high-risk groups, such as those with chronic diseases. Only 69 percent of Chinese over 60 and only 42 percent of those over 80 have received three vaccinations so far, according to official figures. flee

US blacklists 36 chip and AI manufacturers

The United States continues to crack down on Chinese high-tech corporations. The government in Washington blacklisted 36 Chinese companies. Blacklisted companies include memory chip manufacturers Yangtze Memory Technologies (YMTC) and Hefei Core Storage Electronic.

This will prohibit YMTC from purchasing technical equipment from the USA without a special license. The background to this is the concern that YMTC could pass on American technology to companies such as Huawei and Hikvision, which have already been subject to trade restrictions.

Of the 36 companies, 21 maintain close ties to the Chinese defense sector, for example through the production of artificial intelligence chips, according to US data. Seven are reportedly involved in the development of hypersonic missiles and ballistic missiles. One company is linked to the crackdown on the Uyghur Muslim minority in China’s Xinjiang region. rtr/flee

MPs establish Hong Kong parliamentary group

Members of the German Bundestag from the FDP, CDU, SPD and the Greens have formed a new parliamentary group to deal explicitly with the conditions in and around Hong Kong. “With this, we want to show that our solidarity with the people of Hong Kong is unbroken,” said FDP foreign policy expert Frank Mueller-Rosentritt. “There are so many Hongkongers who do not want to and will not give up their free city.” He and the other MPs wanted to send a signal and draw attention that Hong Kong has not disappeared from the political agenda.

This parliamentary circle is also intended to serve as a central contact point in the German Bundestag for representatives of Hong Kong civil society or those in exile, the FDP foreign policy expert announced. Among other things, he wants to support the Hong Kong activist Ray Wong, who came to Germany in 2017 and is the first recognized political refugee from Hong Kong. flee

COP15: Xi promotes solidarity with Global South

The UN Biodiversity Conference COP15 in Montreal entered the decisive phase of the negotiations. In a video address, China’s President Xi Jinping welcomed the approximately 130 environment ministers attending the conference. Xi emphasized the importance of functioning ecosystems for the prosperity of society. In this context, solidarity and international cooperation would be the only effective way to promote the harmonic coexistence of man and nature.

Xi called on all stakeholders to pull together to set goals and ways to protect biodiversity. Ambitions must be translated into actions and developing countries must be supported in implementing the goals.

The background: A fierce dispute erupted at CO15 between some countries of the Global South and industrialized nations over the fair distribution of financial resources. At the opening event of the conference last year, Xi already announced plans to set up his own biodiversity fund to support developing countries. China will contribute the equivalent of around 233 million US dollars.

China holds the presidency over COP15, which was originally supposed to be held in Kunming in 2020, but was postponed several times due to China’s zero-Covid policy and ultimately relocated to Canada (China.Table reported). Officially, the parties are still negotiating a new global agreement on the protection of ecological diversity in Montreal until December 19 (Europe.Table reported). Despite some progress, crucial issues remain unresolved. An extension of the negotiations is considered certain. til

EU Parliament supports protests

The European Parliament expressed its support for the white paper protests in China, making it the first Brussels institution to take a position on the protests in the People’s Republic at the end of November. MEPs voiced their solidarity with the protesters in a resolution adopted on Thursday. They said there was concern about how participants in the protests were now prosecuted. Reports of police checks and interrogations of protesters recently caused a stir (China.Table reported).

Following the temporary detention of a British journalist during the protests in Shanghai, MEPs called for free access to China for media professionals and international observers. EU Parliament resolutions are positions on issues; they are not binding for other EU institutions. The European Parliament generally takes a stricter China policy than the EU Commission or EU Council, which is also regularly visible in its motions.

Meanwhile, the first Chinese diplomat abroad also broke the silence on the protests. They were initially caused by the failure of local authorities to implement the central government’s Covid policy, China’s ambassador to France, Lu Shaye, said during a meeting with members of the press in early December. “But the protests were soon being taken advantage of by foreign forces,” Lu said. “I think the ‘real protests’ only happened on the first day. Foreign forces came into play already on the second day,” Lu said, according to the transcript posted on the embassy’s website. Lu is considered a typical Wolf Warrior diplomat. He regularly attracts attention in France with extreme ideological statements. ari

The Great Wailing Wall of China

When China announced the end of zero-covid last week, people flocked to the Weibo page of Li Wenliang to tell him the news. “Dr. Li, finally it’s over. Already three years,” someone wrote.

On February 1, 2020, the whistle-blower ophthalmologist in Wuhan posted his last public message on the Chinese Twitter counterpart Weibo: “The test results come out positive today. Everything is settled. It is confirmed. (Dog face emoji)“.

Five days later, he passed away.

Li’s death ignited a tsunami of grief and rage unprecedented in Chinese cyberspace, for the death of a young conscientious doctor, for the humiliating admonishment he received for telling others about the epidemic and for the cover-up by the Chinese government.

People wrote numerous comments under Li’s Weibo swan-song post to vent their anger, pay tribute and give their best wishes for his afterlife.

Then some started to talk to him like talking with an old friend, a deceased acquaintance or a revered saint. They sometimes write just a simple hello; they write Happy Birthday on his birthday (October 12th); they post pictures of Li’s favorite food, fried chicken. One person updated Li with the World Cup match results. Another person came every evening to tell Li a joke.

Mostly, however, they tell him about their everyday lives, particularly hardships and miseries caused by the pandemic and the draconian restrictive measures by the government.

Some called it the Great Wailing Wall of China. A website outside of China has been summarizing postings from the Wailing Wall regularly.

“How are you on the other side, Dr. Li? My uncle passed yesterday, two months after my grandpa. I really hope you could meet them over there. You could drink together,” wrote one.

“It’s raining outside. I like rainy days because I can cry without being noticed by others,” wrote another, without telling why they were sad.

A very big part of the comments is about the endless Covid tests and all sorts of restrictions. As time went by, the impact of the restrictions came in variety in different parts of the country. Someone didn’t have enough food for months; someone was caught in the lockdown while on a trip to Xinjiang and was stuck there for two months; someone experienced lockdowns more than ten times; someone lost his job and was not able to pay back the mortgage; someone living in Canada couldn’t get a visa for China to see their dying mother… All of this was written on Li’s page.

Silenced for making the new virus public

“When will this end? Dr. Li, is life only about lockdowns and Covid tests?”

“Dr. Li, we have been having Covid tests every day. My son is four years old. Today I saw him and his little friends playing doctor and patient for a Covid test. Covid test, that’s his childhood so far. I am so sad.”

Some comments are harsher. “Is the Chinese world different from the rest of the world?”

“It’s almost three years, things stay the same, nothing changed.” said one, obviously referring to the government.

“Dr. Li, now you can breathe freely in paradise. And no punishment for telling the truth. If you consider reincarnation, try a different country.”

Li Wenliang already drew public empathy before his death because his experience was a perfect example of how the Chinese government handled crises concerning public interests: Cover up and punish a good-faith, truth-telling citizen.

What Li Wenliang did in the final days of his life made his case even more poignant: he posted a photo of the so-called admonition from the police for “spreading rumors”. In the document, Li had to promise, with his signature and red fingerprints, that he would stop his “law-breaking behavior” and said he understood he would be punished if he continued.

Around the same time he posted the document on Weibo, Li gave a newspaper an interview saying he felt wronged and spelled out this resounding statement: “There should be more than one voice in a healthy society.”

In a country where people live in constant fear, this statement by a mild-looking doctor was extremely courageous.

The government’s reaction to the public opinion surrounding and after Li’s death is also worth a close look.

Why is the account still open for comments?

Of course, Li’s Weibo page has been closely monitored by censors. Four months after his death, the comment function on his page was closed and all comments disappeared, igniting an uproar online.

The comment function was subsequently resuscitated and the old comments came back. But the order of the comments changed. By default, the comment that received the most likes should appear on top. But after some changes, comments appear in order of the time of posting, with the latest at the top. This applies only to Li Wenliang’s page. With this, the harshest, most moving and most sensational messages were literally hidden.

By then, the system displayed already more than 1 million messages under Li’s final post. People continued to write there in the next more than two years, until now. But the count stopped at “1 million+”. Normally, the number of comments to a posting is shown as it is, with no upper limit.

So everything seemed to be under control.

But let us go back to the night Li Wenliang left this world.

According to an investigation by the New York Times, Li died around 9 p.m. on February 6, 2020. Soon enough, the news found its way to Chinese social media. Volcanic fury erupted, it seemed every one of the 1.4 billion was crying, screaming, and cursing, and calling for revenge on social media.

For a few hours, the situation went out of control. I believed the censors were simply overwhelmed and paralyzed by the sheer size of the uproar. They might have tried to delete posts, but then given it up in face of the gigantic amount of expressions sweeping every corner of Chinese cyberspace.

Finally, the leadership came up with an announcement, saying that Li was still on life support. Immediately, comments accused the government of lying to calm the public. However, some were indeed tricked into hoping Li could still survive. He was pronounced dead in the early hours of the next day, 6 hours later than his actual passing, when most people already went to sleep.

Nobody took to the streets back then. The government’s tactic seemed to have worked. But the magnitude of online public reaction was already awe-inspiring. The authorities’ clumsiness showed, although for just some hours, that their sophisticated censorship and surveillance system is not omnipotent.

And that would be something we would see again last month, when people did stand out bravely holding a blank white paper.

China is often seen as a pool of dead water. People there seem to be able to tolerate anything. Now we know, this perception is not always correct.

Cranes at Lake Dongting in the province of Hunan. The migratory birds make their way south from the northeast of the country in October. Bird lovers rejoice at the arrival of the winter visitors. In the warm and watery areas in Hunan, the magnificent creatures also mate in spring. #COP15

CHINA.TABLE EDITORIAL OFFICE

Amelie
Richter

Marcel
Grzanna

Fabian
Peltsch

Julia
Fiedler

Angela
Köckritz

Jörn
Petring

Dear reader,

What happens when important pharmaceuticals are suddenly hard to come by? Germany is currently experiencing this. Fever medication for children is harder to get than usual. Although the shortage is not (yet) caused by delivery problems in the Far East, it can serve as a warning to us, write Christian Domke Seidel and Christiane Kuehl. But they can be a warning to us, write Christian Domke Seidel and Christiane Kuehl. Ibuprofen and paracetamol contain active ingredients that come predominantly from China.

And the situation could get even worse in the coming weeks. Because with the Omicron tsunami currently sweeping across China, many pharmaceuticals are now in short supply there as well. Most of the medicines produced are kept in their own country. Meanwhile, the WHO provides an explanation for the surprisingly fast buildup of the infection wave. The rapid spread of Covid was not caused by the openings at all, but already began to build up before.

German companies in China, on the other hand, have some hope. Their mood may have never been as bad as it was this year. One in two companies will refrain from making any further investments in the People’s Republic in the next two years, or will even leave the country altogether. But at least the relaxations should soon make international travel possible again. And that should help boost the appeal of doing business in and with China.

Your
Felix Lee

Dependence also for ibuprofen and paracetamol

Fever and pain medications for children based on the active ingredients paracetamol or ibuprofen have become in short supply in Germany. The current bottleneck is not caused by problems with shipments from China, but is mainly the result of extreme demand. But the shortages can be seen as a warning shot. After all, Germany’s supply of antipyretics is also dependent on imports. And the most important countries of origin are India and China.

For example, ibuprofen. There are now only six manufacturers of generic ibuprofen worldwide, of which four are located in Asia:

Hubei Biocause and Shandong Xinhua in China,
Solara and IOLPC in India, and
BASF and the SI Group in the USA.