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Medical supply shortages reflect economic relationship between U.S., China

February and March have been very unusual for Jia Yu, owner the Yu Jia Express shipping company in Flushing, Queens. Because of the coronavirus outbreak in China, many Chinese in the United States have shipped medical supplies, including surgical masks, N95 masks and protective clothing, to China since late January to help their families, friends and hospitals cope with shortages.

But Yu said he never thought the same thing would happen here. In March, many packages filled with masks have arrived from China, he said, because of the quick spread of coronavirus in the U.S., especially in New York City.

The shortages highlight the close economic relationship between the U.S. and China. Even after their trade war, their economies are still interdependent.

According to the U.S. Census Bureau, which tracks foreign trade data, U.S. trade with China medical supplies has increased in both imports and exports. While China imports high-tech medical equipment from the U.S., the U.S. also imports a large quantity of labor-based medical products from China., such as masks, gloves and even hand sanitizer.

That helps explain why shortages of medical equipment in the U.S. are now much tougher than they were in China in January. According to the 2019 U.S.-China Commission report to Congress, Americans’ heavy reliance on Chinese pharmaceutical products would put U.S. consumers at risk if China cut off its medical supplies or raised prices during heightened geopolitical tensions.

“Much of the medical equipment that Americans use come from China,” said Michael R. Englund, chief economist at Action Economics, a financial services company.

Eighty percent of the antibiotics used in the U.S. are made in China, according to an article on Politico republished from the South China Morning Post. The coronavirus helped made that reliance more critical.

The outbreak in the U.S. has had a negative impact on most of the country, especially New York State, the hardest-hit state, with more than 30,000 confirmed cases. The shortage of medical supplies in New York City is the most urgent problem.

“I have colleagues who are reporting that they currently have shortages of their personal protective equipment, which includes masks and gloves and gowns,” said Amy Anderson, an assistant professor of professional practice at Harris College of Nursing & Health Science in Fort Worth, Texas.

Anderson said some companies, including 3M and Honeywell, had moved to make medical supplies like N95 masks domestically so that the U.S. can ramp up its production and ensure that frontline workers are prepared and safe while doing their jobs.

Honeywell announced on March 22 that it would expand its manufacturing operations in Smithfield, R.I, to produce N95 face masks.

“I’m not sure where we’re at with numbers,” Anderson added, “and so that for me as a health professional is very concerning.”

On March 22, New York Gov. Andrew M. Cuomo tweeted: “I’m calling on the Federal Government to nationalize the medical supply chain. The Federal Government should immediately use the Defense Production Act to order companies to make gowns, masks and gloves. Currently, states are competing against other states for supplies.”

Under such urgent circumstances, the Trump administration has expressed willingness to remove tariffs on medical supplies from China. The Office of U.S. Trade Representative even issued a request to let more departments possibly “remove duties from additional medical care products.”

But even if tariffs are lifted, some economists say they don’t expect the move to favor the U.S. much. “Given the trade tensions between our two countries, it seems unlikely that they’re going to be favoring us over other countries,” said Eric Gaus, assistant director at Moody’s Analytics. “I imagine on the margin, China would probably favor Europe over us.”

Gaus added that there was not much data on trade with China in medical supplies, but he said that the U.S. should have been placing orders with China three weeks ago and that it was likely most of those medical supplies would come to New York.

The coronavirus does disrupt the economy, including trade, manufacture, and consumption. Even though economists are still waiting for more data, but they have been concerned about how terrible the coronavirus’ influence is to the U.S. trade. “In fact, sometimes I feel like we’re all children,” said David Bodek, senior director at SG Global Ratings, a financial services company.

Yu Jia Express temporarily closed on March 21 because of the order of closing non-essential businesses in NYC – just one more effect of the pandemic that Yu had never expected.

Centre Country feeling less economic pain than others in Pennsylvania

Pennsylvania is among the states hit hardest by the coronavirus, with 1,907,314 unemployment claims filed from March 15 to May 20. But Centre County, in the very middle of the state, is suffering less from shutdowns than the rest of the state.

As a university town, even though the shutdown of the campus, Penn State University has not engaged in extensive layoffs, but no one knows if that will continue if students do not return to campus in the fall.

“I would say that Centre County is going to be able to serve itself during the coronavirus,” said James Tierney, an assistant teaching professor of economics at Penn State University. But since its economy is largely driven by Penn State University in State College, he said, the current shutdown is likely to hurt it, at least until students return to campus.

As the U.S. unemployment rate rose in April to over 14 percent – the highest since the Depression, according to data on initial claims by week and state — Pennsylvania’s labor market also went through a dark time from mid-March to the end of April. Around 20% of the state’s workers filed claims since March 14, 7% more than even New York State, according to the state Department of Labor and Industry.

Centre County had the fewest unemployment claims among Pennsylvania counties in the three weeks from mid-March to mid-April. Some companies, including Wegmans and Walmart, are still hiring in the county. Only at the start of this month did Penn State begin furloughs at 50 percent pay, said Paul Grieco, an associate professor of economics there, but the university hasn’t laid off employees so far, according to an announcement of Penn State President Eric Barron.

“Pennsylvania is only second to California for job loss in the highest unemployment claims,” said Katherine Eva Maich, an assistant professor of labor and employment relations and women’s, gender and sexuality studies at Penn State. “So in a way, we’ve really been hit hard as a state.”

Why Pennsylvania’s unemployment rate is so high
Pennsylvania was among the first states that ordered businesses to shut down to slow the spread of the coronavirus. On March 19, Gov. Tom Wolf ordered all non-life-sustaining businesses to close their physical locations.

“Every human-to-human contact is a chance for the virus to spread,” Wolf said in late April, “so more contacts mean a higher likelihood of an outbreak.”

With two metro areas and its location close to New York, it was impossible for Pennsylvania to protect itself from the coronavirus. “There’s a combination of these large metro areas with Pittsburgh and Philadelphia,” said Tierney. “Philadelphia, specifically, having the airport where a lot of people connect.”

Why Centre County is having an easier time
Dominated by a college town, Centre County is very different from most counties in Pennsylvania because its core economy is closely dependent on Penn State University. According to a study released in 2019, the University Park campus of Penn State provided 52,231 jobs and contributed more than $11.6 billion to the state’s economy and supporting in fiscal year 2017.

The coronavirus outbreak in Pennsylvania came just at Penn State’s spring break, when most students went home. Centre County is also “relatively rural with low-density setting,” which slowed the spread of coronavirus, Grieco said Penn State’s associate professor Grieco.

“With not having as many students here currently, that just makes us have a little bit more room,” Michael Pipe, chairman of the Centre County Board of Commissioners, told The Centre Country Gazette on April 30.

Some regional programs to help businesses are now in process. The federal Paycheck Protection Program and the Pennsylvania Industrial Development Authority are providing loans and grants to local businesses.

Team Blue Hand Car Wash and Detail in State College reopened on April 18. “We didn’t lay anyone off, and we actually ended up getting a small business loan from the government,” said Joe Svoboda, a co-general manager. “We’re happy to have the customers do come out, but definitely the coronavirus has affected us a little bit.”
But with Penn State empty of its students, the local economy will be hurt, experts said. “It represents 50,000 people that are not here,” said Dave Brown, a director of undergraduate studies and a teaching professor of economics at Penn State. “If they’re not here, they’re not buying and spending.”

Josh Baylson, a cashier at a Uni-Market convenience store a 10-minute walk from campus, said the store’s customers had sharply decreased since March.

If Penn State continues online this fall, there will no football games. “The lack of a football season would greatly hurt the local economy, as the games bring in 100,000-plus people who spend money on Penn State clothing and game tickets, as well as food, dining, gas, and lodging,” Brown said.

“No football would represent a huge reduction in demand for many of these local places,” he added.

All school-related businesses will also be suspended, including Central Pennsylvania Festival of the Arts, and conferences. What’s more, the service industry and rental market in Centre County will be devastated.

“Bars, restaurants and hotels are really going to be hurt by the students not being here,” Tierney said. “Not that the students themselves use the hotels, but when parents come back for graduation. So hotels are getting crushed as well.”

“A lot of students would rent their apartments,” he added, “but now they’re either not going to if they don’t come back in the fall, or they might try and get out of their lease as early as possible.”

Is it too soon to reopen?
Centre County will be among the first 24 counties in Pennsylvania to partially reopen, moving from red phase to yellow phase since May 8. “Working together, we Pennsylvanians have flattened the curve,” Wolf said.

The state’s guideline for reopening is fewer than 50 new confirmed cases per 100,000 population over a two-week period. With a total of 136 confirmed cases in a population of 841,000, according to the 2010 census, Centre County meets the requirement, though local officials said full reopening would take the rest of the year, if there is no second wave of virus.

“I think that the citizens are handling it really well,” Pipe said. “And we’re trying to do our best to take each day, day by day. So I’m very hopeful for the future.”

Some experts say they think the reopening may not be the right decision. Low consumer confidence is a major factor. “Ultimately, it is consumers who will decide whether business should be open,” Grieco said. “With so many activities still restricted, it is going to be hard for consumers to have confidence that it is worth the risk to go out.”
“With so much of the local economy being focused on services, that won’t amount to a full re-opening,” he added.

Tierney said: “I don’t see us going really back to normal until we have some sort of vaccine, which may not be till next spring semester. I can see us reopening bit by bit, but I don’t foresee us being able to have large type of lecture classes that Penn State has, and I don’t see us having football with a bunch of fans.”

He also said the county shouldn’t be so reliant on the student population. “We should try our best possible way to diversify the industries that are in town,” he said.

Agriculture, traditional manufacturing and mining, and high-tech manufacturing are other main segments of the County’s economy.

Brown said he was looking forward to going back to his office and teaching in the classroom. “My kids haven’t seen their daycare and preschool classmates in almost two months, and we’ve had them at home every day,” he said by e-mail. “However, I am pessimistic that PSU will reopen this Fall and am planning on just being remote again. Classrooms (especially large ones) will be deemed too risky.”

“I’m just glad that I’m not the one who has to make the decision to reopen or not,” he added.

Maich said she was concerned about safety. “We have to value the human cost right,” she said.

“We have to think about people’s lives and their families, and their safety first, before we only consider this through an economic lens.”

U.S. trade deficit narrows markedly as coronavirus limits U.S. imports

The U.S. trade deficit continued to narrow in February with a steep fall in imports but a slight increase in exports, which is just a start showing the impact of the coronavirus pandemic.

U.S. exports of goods increased by $0.7 billion over January, the U.S. Census Bureau said Thursday, while goods imports fell by a significant $5.3 billion, narrowing the trade deficit by 9.1% in February

The coronavirus is the main cause of the drop-in imports, as it was disrupting supply chains. The significant decrease in imports is not a good sign, since falling imports are likely to lead to shortages and could decrease consumption, even though the continuous narrowing of the deficit is what the Trump administration wants.

The virus’s negative influence started in February, with many factories in China having shut down in late January and the Chinese economy effectively halted for almost a month. The pandemic has disrupted manufacturing in China, which has also influenced U.S. imports in supply chains. In February, the coronavirus quickly spread to other Asian countries, including South Korea, Japan and Malaysia, which are also essential to U.S. trade.

The coronavirus influence on transportation is the main factor leading to the decrease in U.S. imports.

“Chinese exports were severely hampered by the ports’ being closed in February,” said Michael R. Englund, chief economist at Action Economics, a financial services company. “So our imports of goods from China starting in the second half of February are going to show a huge drop-off.”

As the coronavirus spreads around the world, the port of Long Beach, Calif., unloaded only half the amount of Chinese goods this February as it did in February 2019, according to harbor officials.

Kurt Forsgren, managing director at SG Global Ratings, a financial services company, agreed that transportation issues were depressing U.S. trade. “On the port side, there would be the same exposure to China trade. The ports are experiencing significant declines in container volumes,” said Forsgren.

With the number of coronavirus cases in China declining but rising all over the world, U.S. trade transportation, especially the shipping industry, will have to struggle longer with falling demand. Economists say the decreased U.S. imports will be a major trend in at least next couple months.

Justin Flaten, president of JM Grain in North Dakota, which is a company processes and ships pulses, said though his company was not doing a lot with China since trade war, he was still concerned about how coronavirus would limit people’s daily lives, thus damaging trade. “We’re trying to keep the doors open, but probably the next uncertainty which is common to all industries is, can people stay healthy?” he said.

The U.S. exports are not very obviously threatened by the coronavirus based on the February report, since the U.S. wasn’t feeling anything, said Eric Gaus, the Assistant Director at Moody’s Analytics. It’s mostly like that sort of momentum of exports that was going into the same situation as imports now.

While uncertainties continue, it is clear that the virus will have a negative impact on U.S. trade. For most countries, “Selling anything abroad anymore, so like all of that’s going to stop in March,” said Gaus.vvv

Bubble tea industry booms in Flushing

At 10:05 on a Wednesday night in Flushing, Queens, many customers were still coming to buy the most popular bubble tea at Tiger Sugar brown sugar boba milk with cream mousse.

“The last one,” said Xinyu Li, 18, a cashier at Tiger Sugar. “You’re lucky!”

As Flushing’s Chinese population increases, the bubble tea industry is booming. “There are more than 20 bubble tea stores in Flushing,” said Li. “It’s very competitive now, but I think young people here like bubble tea very much, so there will be more and more customers.”

Flushing is not Starbucks country. More and more Asian immigrants in Flushing are choosing bubble tea – flavored tea-based drinks, originally from Taiwan, often topped with tapioca pearls or jellies -- over coffee.

“I never drink coffee,” said Liren Zhang, 23, a Columbia University student who came to the U.S. five years ago. He said buys a bubble tea every time he goes to Flushing. “We don’t drink coffee in China,” Zhang said, “but we always drink bubble tea.”

Zhang’s friend Yao Dai, 22, agreed. “I usually buy bubble tea at least three times a week,” he said.

Another factor may be the trend of “famous bubble tea” made famous on the internet.

Mariska Kop, 22, came to Flushing with her friend Veronica Lee, 22, specifically for Tiger Sugar bubble tea last Sunday. They said they had seen a post about Tiger Sugar in a Facebook group called Subtle Asian Traits.

“It is very popular on social media,” said Kop. “So we decided to try it this weekend.”

If one bubble tea shop is successful, others will follow, said Rebekah Chi, 19, who works at Teas My Dear on Main Street in Flushing. “There are too many bubble tea stores in China, especially some famous ones on the Internet,” she said. “So people here are opening more and more bubble tea stores to make profits.”

Albee Pan, 30, the shop’s manager, agreed. “Under such a trend, it’s not strange that people want to make money,” she said.

Allen Wu, 35, who works at Mi Tea, another popular store in Flushing, explained that theoretically the bubble tea industry was adapting its popularity in China to the U.S. market.

“Mi Tea actually had the first bubble tea that was famous on the internet in the U.S.,” Wu said. “Then more and more ‘famous bubble tea’ came up after us.”

‘Life is too expensive here’: Senior immigrants in Flushing putting off retirement

It’s almost 10 p.m. in downtown Flushing, and Ming Gao is busy cleaning up after a 10-hour day at C J Food Market where he works as a butcher.

Gao seemed tired. “Work is not easy,” he said. “I definitely wouldn’t work if I were in China. Life is too expensive here, and I want to help reduce the pressure on my children.”

Gao, 63, is only one of the large number of seniors living in Flushing who are working past 60, what is a normal retirement age in China. It has been eight years since he immigrated to the U.S. from China.

John Liu, 80, is actively seeking part-time jobs. He ran a small clothing factory before retiring two years ago, but he said he didn’t like retirement.

“If there is a job without a heavy physical requirement, I’ll go for it,” Liu said. “I can earn money while keeping busy. It’s good.”

According to a report this year by the Center for an Urban Future, an independent, nonpartisan policy organization, the number of New York state residents over 65 increased 26 percent over the last decade. Seniors are the fastest-growing segment of the state’s population.

In Flushing, the elderly residents account for 17.5 percent of the population, whereas across the city, that number is 13 percent. But most of the Flushing’s seniors are Chinese. Some are even new immigrants. They are facing challenges in language, culture and finances.

“To be honest, it’s really hard to find a job for new senior immigrants who cannot speak English,” said Penny Shen, a senior coordinator at the Chinese-American Planning Council (CPC) in Flushing, who is responsible for the organization’s Senior Community Service Employment Program. “The possibility of finding jobs depends on applicants’ abilities, but English is a primary obstacle. It might be too late for them to learn English.”

Many seniors in Flushing cannot find regular office jobs because of the language barrier. Many senior men work in restaurants working as kitchen helpers or dishwashers. Some senior women work as home-care workers for Chinese families in Flushing. None of those jobs require English.

Shen also said one-third of seniors who ask CPC to help with job-hunting are struggling financially.

“I don’t plan to retire so far. The living expense in Flushing, especially the housing rent is too expensive. I’ll keep working when I’m still healthy,” said Zhaoyue Sun, 62, a cook at North Restaurant in Flushing since 1995.

What can 5 cents buy? For canners, a better life

Ning Zhang deftly poured out the water left in a bottle and put the empty bottle into her plastic bag late one chilly November night on Main Street in Flushing, Queens.

“It’s getting harder and harder to find bottles and cans in winter,” said Zhang. “But I’m still checking trash cans and restaurants every day.”

Zhang, 80, originally from Tianjin, China, is only one of many seniors in Flushing who pick up cans and bottles to supplement their family incomes. Similar stories are portrayed by Siyan Wong, an artist who spent five years painting canners in New York City, in an exhibit at the New York Arts Center until Dec 1.

In 1983, the State Legislature passed a New York State Returnable Container Law, setting a 5-cent deposit for recyclable containers, including cans and bottles. That law led to the rise of canners – the people who collect cans and bottles from streets and turn them in for money.

“I saw a woman carrying 600 bottles for recycling,” said Johan Perez, assistant manager at the Food Plus convenience store in Flushing. “That’s crazy, but she could get a lot of money.”

Zhang immigrated to the U.S. 10 years ago. She cannot speak English. But she gets to know people at every different recycling spot in Flushing. At Food Plus, she puts her cans and bottles into a machine, then stands in the line of customers to exchange her receipt of cans and bottles for the deposits.

“They know me,” Zhang said, speaking in Mandarin. “They know what I’m doing here, and they will automatically give me money back after checking my receipts.”

She said recycling cans and bottles supplements her family’s income. “Who doesn’t want to pursue a higher-quality life?” she said.

Yanhong Wang came to a recycling machine with three plastic bags filled with cans and bottles. She is shorter than the machine, but she stood on her tiptoes to make sure she threw every can and bottle into the machine. “We have to be careful,” said Wang, “The machine is always slow and easily broken.”

Karlin Chan, a community advocate and activist who speaks up for canners on Twitter, explained why so many Chinese seniors work hard to pick up cans and bottles. “Sometimes seniors cannot get jobs here because they cannot speak English,” he said. “They even cannot find a job cleaning restaurants.”

Picking up cans and bottles from trash cans on the street is actually illegal in the city because trash belongs to the companies that pick it up. “Garbage companies are definitely not satisfied with those canners,” said Chan. “They lose money and value, and canners are facing potential arrest for stealing.”

Wong said she respected those canners and supported their right to survive.

“It’s ridiculous to talk about the law that punishes people for trying to survive,” said Wong. “Like illegal immigration, until we recognize that people need to live, they need to survive. The problem is the law, not the people.

“It’s never illegal to live!”