The Covid-19 crisis is raising unprecedented legal questions for companies throughout the world. We have put together a checklist summarising the main points of attention under company law, for both listed and non-listed companies, related to the impact of Covid-19. Please click here to access it. We are advising a number of companies on those issues and will be happy to answer any questions you may have: feel free to reach out to your usual contacts at Linklaters.

Mr. Tom Zhou, Felix Europe BVBA, donates more than 1000 medical protective clothing to hospitals in the Province of East-Flanders

The Province of East-Flanders and the Flanders-China Chamber of Commerce facilitated the donation to combat the Covid-19 virus.

Mr. Tom Zhou, born in Weihai, Shandong province, and living in Belgium, is General Manager of Felix Europe BVBA, exporter of quality goods from Europe to China. The company donated more than 1,000 medical protective overalls to multiple hospitals in Flanders e.g. UZ Gent, Maria Middelares, Sint-Vincentius Hospital Deinze and A.S.Z Hospital Aalst to support the fight against the Covid-19 virus.

The overalls are produced by the Chinese No. 1 manufacturer, Dishang Group in Shandong province.

One of the emerging industries in the city of Weihai is the medical & healthcare industry. The core industries of Weihai are machinery, food, transportation equipment, textiles and garments, medicine and medical devices, electronics and new materials.

The Flanders-China Chamber of Commerce and the City of Weihai have a longstanding cooperation agreement. The city has major investments from several member companies such as those from Bekaert, Beaulieu Technical Textiles Beaulieu Fibres & Yarns.

www.flanders-china.be – gwenn.sonck@flanders-china.be
https://oost-vlaanderen.be/ – nausikaa.lagrou@oost-vlaanderen.be

As of 0:00 h. on March 28, China banned foreigners from entering the country, even those with a valid visa or residence permit. Only a few exceptions are allowed, such as for diplomats or those who have obtained a new humanitarian visa. The measure aims to stop the increasing number of travelers arriving in China from abroad who are infected with the SARS-CoV-2 virus. Chinese passport holders are still allowed to enter the country, but they will be tested for the coronavirus and quarantined for 14 days. Chinese airlines drastically reduced the number of international flights, as they are now almost exclusively reserved for Chinese nationals. About 90% of all the imported cases are Chinese passport holders, Vice Foreign Minister Luo Zhaohui said, adding that 40% were Chinese students returning home.

“In view of the rapid spread of the new coronavirus epidemic worldwide, China has decided to temporarily suspend entry of foreigners with currently valid visas and residence permits in China,” the Chinese Ministry of Foreign Affairs said. “This is an interim measure that China has to take in order to respond to the current epidemic situation, with reference to the practice of many countries,” it added. “The Chinese side will adjust the above measures according to the epidemic situation through separate announcements.” Foreign citizens coming to China for “necessary economic, trade, scientific or technological activities or out of emergency humanitarian needs” can still apply for visas.

International flight routes will also be drastically cut. China’s aviation regulator has asked domestic airlines to reduce their international routes to only one per country while capping the number of flights to no more than one flight per week. Airlines are required to cap the passenger load factor on inbound and outbound flights at 75% to curb contagion risks. Some Chinese provinces have suspended all international flights, initially for 14 days. On March 25, Shanghai Pudong International Airport ranked first in international connections, still accepting 51 overseas flights, followed by 18 flights to Guangzhou, 10 flights to Beijing, and seven flights to Xiamen in Fujian province. But those number were down from the beginning of the month, when Shanghai welcomed 52 international flights, Beijing 25 and Guangzhou 18.

The number of scheduled international flights is expected to drop to 108 this week, down from 734 for the previous week and only 1.2% of the weekly volume before the pandemic. Beijing, Shanghai and Guangzhou, will operate 61 international flights this week, down by 89% from the week before. The daily number of incoming air travelers will also go down from 25,000 to 4,000 for the same period, officials said.

Last week, for the first time in two months, cities in Hubei province – except for Wuhan – lifted some travel restrictions, allowing for visitors from outside the province to return home and for migrant workers to return to their workplaces. The lockdown in Wuhan will be lifted on April 8. Several days after China reported no new cases – except for imported ones – Premier Li Keqiang warned local authorities not to cover up new cases of Covid-19 to prevent new outbreaks now that Chinese employees return to work. He ordered them to stick to the prevention measures of ‘early detection, reporting, isolation and treatment’, to stop the epidemic in certain areas and prevent an even bigger outbreak.” Airports in Hubei province have resumed flight services except for Wuhan Tianhe International Airport, which will follow on April 8. Wuhan has had its coronavirus risk evaluation downgraded from “high risk” to “medium risk”.

About 6 million Hubei residents now work outside their home province and 70% of them had returned to their hometowns for the Spring Festival holidays in January and have been stranded ever since. For some of those trapped at home, the prolonged holidays have become much more stressful rather than relaxing as they might have faced losing their jobs due to a delayed return, or being kicked out by landlords in the cities where they work due to discrimination against Hubei natives. Those stranded in Hubei – except for Wuhan – have now started returning to work in other cities in China. In Wuhan, services resumed on 117 bus routes, around 30% of the city’s total bus transport capacity. Six metro lines restarted service on March 28. Seventeen railway stations in Wuhan started receiving arriving trains and will begin outbound operations on April 8 – also the date the city is scheduled to reopen all inbound and outbound bus services.

Commercial businesses in Wuhan, the hardest-hit city in China by COVID-19, partly reopened on March 30 after more than two months of suspension, signaling a milestone in the country’s hard fight against the epidemic. The first day some shopping malls reopened, some employees and shop owners told the Global Times the number of visitors and the shops’ income was more than half of the normal figures. “Some people are still cautious about going to public places. Besides, not everyone is allowed to go out due to the restrictions in residential communities,” an employee at the Zhongshang mall told the Global Times on condition of anonymity.

Wuhan’s cargo and logistics transportation is also resuming. On March 28, a China-Europe freight train carrying 50 cargo containers left Wujiashan Railway Container Station in Wuhan en route to Duisburg, Germany, for the first time since the outbreak began. Nearly 90% of all goods aboard were produced locally in Wuhan, including 166.4 metric tons of medical supplies.

Several tourist spots and cinemas in Chinese cities reopened their doors last week, but have now been ordered to close again, as fears mount that infected travelers and those showing no symptoms could cause new outbreaks. Qiu Yunqing, Executive Vice President of the First Hospital affiliated to the Zhejiang University School of Medicine in Hangzhou and the leader of medical team from Zhejiang province that went to Italy to help local hospitals cope with the Covid-19 pandemic, said the best way to minimize the risk of being infected is to stay at home. Qiu also advised Chinese people overseas not to rush back to China unless the trip is absolutely necessary. “The risk of coronavirus infection could be higher on the way to China than at home,” Qiu said.

This summary was compiled based on reports by the China Daily, Shanghai Daily, Global Times, the Guardian and the South China Morning Post.

Chinese ventilator manufacturers are ramping up efforts to supply countries ravaged by the novel coronavirus, while calling for a smoother and integrated global supply chain to guarantee production. “With demand for ventilators soaring all over the world, we’re short of components, from basic items like steel metal parts to imported parts,” Cui Gang, Clinical Director of Beijing Siriusmed Medical Device, told the Global Times. He said there are nearly 1,000 orders from overseas that the company’s manufacturing facility will fill by June, and certain domestic companies may have orders lasting until the fourth quarter of this year. However, insufficient supply of raw materials, especially core components, is the biggest problem that curtails production, Cui said. “We even use new ventilator products to trade for core components that are in tight supply,” Cui said. Other big manufacturers like Mindray and Beijing Aeonmed Co are also accelerating manufacturing amid surging overseas demand.

London-based analytics firm GlobalData estimated that about 880,000 more ventilators are in demand globally amid the epidemic, with the U.S. reporting a gap of 75,000 ventilators, while France, Germany, Italy, Spain and the UK are collectively short of 74,000 devices. In the U.S., Ford, General Motors and Tesla have responded to government calls to make ventilators, while the UK last week began to deliver ventilator blueprints to over 60 military engineering companies and car manufacturers including Rolls-Royce and Unipart. China’s Anhui Zhongding Sealing Parts Co announced it would supply precision premium rubber sealing parts for GM’s ventilator manufacturing project.

“Overseas ventilator orders have been soaring. The orders are mainly from Europe. In early March, we received an order for nearly 10,000 pieces of medical equipment, mainly ventilators and monitors, from Italy. The goods have already been shipped and we expect the entire order to be completed by the middle of April,” said May Li, Executive of medical equipment manufacturer Mindray. “The company has a relatively localized layout, such as in operations, sales, and after-sales, in the overseas markets. Only a small amount of our raw materials comes from overseas markets, which we have already sourced, and we have also found alternatives to them. In addition, with the increasing production capacity and the improvement of the situation in China, we see no problem in timely product deliveries,” Li said. Li Kai, Assistant to the Chairman of Beijing Aeonmed, an anesthesia and respiratory medical equipment enterprise, said: “Our plants are working around the clock to increase production capacity as we have received orders from several countries”. He added that earlier demand for ventilators, which are normally used in the intensive care units (ICUs) of hospitals, was not that high.

According to market research consultancy Wismar, the top five Chinese ventilator brands are Mindray, Aeonmed, Comen, Amoul and Superstar. During the first six months of last year, China exported respiratory medical equipment to 166 countries and regions, valued at USD360 million, up 8.41% on a yearly basis. Industry Expert Zhang Xun said that “Chinese enterprises have completed the transformation from ‘Made in China’ to ‘Created in China’ and become an integral part of the global respiratory product market,” the China Daily reports.

Xu Kemin, an official with the Ministry of Industry and Information Technology (MIIT), said overseas demand for multifunction ventilators is surging, and manufacturers in China are toiling day and night to meet the growing demand. “China has 21 multifunction ventilator makers and eight of them have obtained the European Union’s compulsory CE marking,” Xu said. The companies have already signed contracts for 20,000 multifunction ventilators, and many more are pouring in every day. “Since March 19, these companies have provided more than 1,700 multifunction ventilators to overseas hospitals. That equals half of this year’s supplies to domestic hospitals,” Xu said, adding it was difficult to scale up production as some parts are imported from Europe.

Currently, top global ventilator manufacturers include Germany’s Dräger, Sweden’s Getinge Group and Switzerland’s Hamilton, while Chinese brands are in the low to medium range of the spectrum. However the performance of Chinese made ventilators has made progress, with leading domestic manufacturers like Mindray climbing to the second tier among all ventilator brands in the world, according to the Global Times.

China will also strive to maintain the stable domestic production of active pharmaceutical ingredients and ensure the security of the global supply chain. Having more than 1,500 production enterprises, China is the world’s largest producer and exporter of pharmaceutical ingredients with an annual output of around 3 million tons. Currently, more than 80% of China’s pharmaceutical ingredients production has resumed.

A controversy has erupted about the quality of some medical supplies that foreign countries imported from China. But the Chinese government and Chinese Embassies emphasized that the issue should not be politicized. They point out that a distinction should be made between supplies provided with Chinese government support on the one hand and deals made between foreign buyers and Chinese companies, whose products may not have received quality approvals from the Chinese government on the other hand. The company that provided Covid-19 test kits to Spain did not get a license from China’s authorities for selling its products, the Chinese Embassy to Spain said on its Twitter account in response to claims that these test kits were “substandard”.

Spain has bought USD467 million in medical supplies from China, including 950 ventilators, 5.5 million test kits, 11 million pairs of gloves and more than half a billion face masks. But the test kits involved in the incident are not the ones it bought from the Chinese government – they were imported by a Spanish supplier from a Chinese manufacturer. The test kits were found to be of “low sensitivity” and the Spanish government decided to return the products and contact the manufacturer to replace the tests kits with another batch. The market supervision administration in Shenzhen has started an investigation into the company, it announced in a notice. The test kits were produced by Shenzhen Bioeasy Biotechnology. The company claimed on its WeChat account that the low sensitivity of the test kits used in Spain was due to the users not following the instructions properly in the process of taking samples, the Global Times reports.

China’s sincere efforts to help others fight Covid-19 by facilitating purchases of made-in-China medical supplies should be respected, Foreign Ministry Spokeswoman Hua Chunying said, adding that any political interpretation of the moves should be avoided. The remarks came after media reports said some countries raised concerns over the quality of the Chinese supplies, or questioned the motives of the country’s efforts to help others. Hua said many countries have recently purchased Chinese medical supplies as the contagion spreads worldwide, and Chinese enterprises are working round-the-clock to produce products that help protect people’s lives in many countries. “While guaranteeing domestic supply, we support qualified and reputable companies to export medical supplies and we also provide convenience in terms of manufacturing, transport and customs clearance,” she told reporters at a news conference in Beijing.

In Slovakia, inaccurate results of rapid detection kits purchased from China were due to medical personnel misusing antigen test kits. As for the so-called defective masks that the Dutch government purchased from China, some masks purchased by the Netherlands are not adequate for use in intensive care units, the China Daily reports.

Josep Borrell, High Representative of the European Union for Foreign Affairs and Security Policy, has called on EU countries to stand ready for a “struggle for influence” in a “global battle of narratives” as Beijing has called its campaign to send millions of face masks to Europe a show of solidarity and friendship. Borrell noted that the focus had shifted from Europe helping China to the other way round. “China is aggressively pushing the message that, unlike the U.S., it is a responsible and reliable partner.” But European Commission President Ursula von der Leyen thanked China for providing the EU with medical supplies, including 2 million surgical masks. She called it a “reciprocal” act given the EU had dispatched similar equipment to China during the start of the outbreak.