China’s coronavirus testing ‘overkill’ gives economy a shot in the arm, with huge windfall for industry

Cissy Zhou
·4-min read

A knock at the door jarred Susan Li out of bed on a chilly morning in Beijing last month.

“Nucleic acid test,” proclaimed the woman outside Li’s home. And then her neighbour’s home. Then the next home. And so on, with the knocks stretching well into the millions across the country.

In Li’s case, the testing came a day after Beijing recorded two new cases of the coronavirus, in Daxing district. Even though the 33-year-old lives more than 10km away, Li was among the 1.8 million residents in the district who were tested over the following week.

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“The line was so long that I waited about two hours to get tested,” she said. “I was a little scared because the line was dense, what if I got infected? I would rather just stay at home.”

In total, four positive tests were recorded. And then a second round of testing was conducted a week later. Same routine.

Today, mass nucleic acid testing is the “new normal” in the world’s second-largest economy.

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These types of mandatory tests are free for tens of millions of recipients across the country. But many individuals – those not from “low-risk” cities – who plan on defying government urgings not to travel over the upcoming Lunar New Year holiday must pay for their compulsory test.

Meanwhile, the makers of these coronavirus tests are riding a huge windfall that is seeing billions of yuan injected into various sectors of China’s economy.

Transport authorities expect about 1.7 billion trips to be taken during this year’s Spring Festival travel season, known as chunyun – the world’s largest human migration that sees millions of people travel thousands of miles across China to reach home for the Lunar New Year – with an average of 40 million travellers per day, or 10 per cent more than last year.

Private nucleic acid tests cost about 120 yuan (US$18.60) to 270 yuan each across the country. And the testing fee in public hospitals was recently lowered to 80 yuan amid public complaints about the high fees. But as demand for testing has surged, some third-party organisations are charging up to 299 yuan per test, according to state media reports.

Testing for this year’s chunyun will contribute 15 billion to 30 billion yuan to manufacturers of test kits, and will contribute 60 billion to 120 billion yuan to hospitals and third-party testing institution, according to fresh estimates by Anhui-based HuaAn Securities.

It is not clear how many people in China have already been tested, but Guo Yanhong, a medical administration supervisor with the National Health Commission, said last month that a total of 8,437 medical institutes across China had the capacity to conduct Covid-19 nucleic acid testing, examining 12.55 million samples a day without using mixed tests.

And she added that by utilising a so-called 10-in-one mixed-testing approach, China could test more than 100 million samples daily. This is done by combining 10 samples into one, then testing that one sample, rather than conducting 10 separate tests. If the result if positive, those 10 individuals must be retested one by one. But this testing method still ends up being faster, cheaper and more efficient.

Nonetheless, even with mixed testing, makers and providers of testing kits are reporting exorbitant profits.

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Sansure Biotech, a Changsha-based firm that manufactures products for molecular laboratories, said in a statement that its net profit for 2020 was expected to grow by up to 2.8 billion yuan (US$433.4 million) – a year-on-year increase of up to 7,008 per cent.

Da An Gene, a Guangzhou-based firm that manufactures a reagent for the nucleic acid test, has estimated that its net profits for 2020 reached up to 2.2 billion yuan – an increase up to 2,286 per cent over the previous year. Eighty per cent of its products go to the domestic market, and the rest are exported, the company said in a statement.

EasyDiagnosis Biomedicine, a Wuhan-based company involved in the testing industry, expected its net profits for 2020 to rise by 500 million yuan over 2019 – a year-on-year surge up to 1,104 per cent. And 60 per cent of its revenue in the past year came from sales of a Covid-19 test reagent.

Wu Zunyou, chief epidemiologist with the China Centre for Disease Control and Prevention, said in October that testing millions of people has a high social cost, and is not supported by science. He added that citywide Covid-19 tests are unnecessary, and more limited testing should be enough to stop the disease from spreading.

Otherwise, he said, it will be “overkill”.

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