Rita Panahi: China dominates pharmaceuticals and that’s unhealthy for us
Australia’s reliance on China for medical equipment and pharmaceuticals threatens the future health of the nation. We must be more self-reliant, writes Rita Panahi.
Rita Panahi
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The coronavirus crisis has exposed the depths of Australia’s, and indeed the world’s, unhealthy reliance on China for essential goods, including medical equipment and pharmaceuticals. Australia spends billions annually on imported medicines with about a third of the population taking a prescribed medicine daily. We currently import more than 90 per cent of medicines with a key dependency on China, according to a report by The Institute for Integrated Economic Research.
It concluded “Australia is particularly vulnerable to medicine shortages arising from factors outside our control” and we have effectively “outsourced almost all of our medicine supply chain to the global market”.
Even the drugs we import from the US are typically dependent on supplies from China. The report follows extensive US research into China’s dominance of the pharmaceutical supply chain, a fact that was deemed a risk to national security in US Congressional Commission hearings last year.
The US imports 95 per cent of ibuprofen, 91 per cent of hydrocortisone, more than 80 per cent of antibiotics and 70 per cent of acetaminophen from China, according to Commerce Department data released last year.
While the US remains a leader in research, much of the manufacturing has progressively moved to China since the 1990s.
“China has managed to dominate all aspects of the supply chain using the same unfair trade practices that it has used to dominate other sectors — cheap sweatshop labour, lax environmental regulations and massive government subsidies,” said White House trade adviser Peter Navarro. China produces half of the world’s supply of surgical masks and though it increased production after the coronavirus outbreak, it initially hoarded the supplies for its own use as well as buying a significant percentage of the world’s supply.
One country hopelessly underprepared for the global catastrophe unleashed by China is Italy, which has the world’s highest coronavirus death rate of 9 per cent. Italy has only one ventilator manufacturer and a lack of medical equipment has seen some elderly sufferers go without treatment.
In 2018, health-care expert Rosemary Gibson and World Bank economist Janardan Prasad Singh wrote a book, China Rx: Exposing the Risks of America’s Dependence on China for Medicine, that was prophetic. In November, before we knew of the latest virus to originate from a Chinese wet market, Gibson warned US politicians of the dangers of China’s dominance of pharmaceutical supplies.
“Medicines can be used as a weapon of war against the United States … supplies can be withheld,” she said. A couple of months earlier she told the US-China Economic and Security Review Commission what would happen if China cut off supply: “Children and adults with cancer will suffer without vital medicines … For people on kidney dialysis, treatment would cease, a veritable death sentence.”
Former US ambassador to the United Nations Nikki Haley is among those imploring the US to recognise the danger and become more self-sufficient: “80 per cent of ingredients used to make American drugs are from overseas. Most of that comes from China. Time for the US to realise the importance of becoming self-reliant,” she wrote last week. But at least the US has recognised its vulnerability. In Australia we seem to be far more relaxed about our reliance on China for essential goods and medicines.
Our dependence on China would be a concern even if the superpower was a democratic nation which shared our values. But China is not our friend. The Communist regime doesn’t have our best interests at heart nor does it embrace the values of democracy, free speech or free trade. A regime that oppresses its own citizens, subjects people to arbitrary detention and torture, engages in politically-motivated prosecutions, executes dissidents and has developed a North Korea-style “social credit system” is not to be trusted. Don’t forget that at the outset of this outbreak, China destroyed lab samples and arrested doctors who tried to warn others of the virus in Wuhan. China also persecutes religious minorities, including putting a million Uighurs in camps where they are subjected to horrifying mistreatment. But these abuses are largely ignored by the international community because of China’s huge trading power. Western governments, of all political stripes, have effectively sacrificed their manufacturing sectors to China. While our governments think from election to election, China takes a long-term approach to increasing its power and influence across the world. As the IIER report points out, Australian governments have shown a “blind trust in the market approach to governance, risk and resilience” and it is imperative that we now take practical steps to ensure medical supply security.
Rita Panahi is a Herald Sun columnist
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