The rise and fall of China’s PCR testing firms

By Guillermo Benavides
Beijing, Dec 15 (EFE).- PCR testing firms have long been the backbone of China’s ‘zero Covid’ policy, which has been in place for two years, but recent unrest has triggered an easing of pandemic measures and with that the laboratories that were once frantically testing the population daily now face an uncertain future.


In May of this year, over 3,400 companies working to assist the central government in the detection of Covid-19 cases were registered in China, according to the Tianyancha public records database.


But as the Covid-19 pandemic heads into its fourth year, the once flourishing industry is lagging and facing public criticism over irregularities and an uncertain future as Chinese citizens now turn to rapid antigen tests.

Stratospheric rise and fall

People take Coronavirus PCR test in the street testing booth, in Shanghai, China, 14 December 2022. EFE/EPA/ALEX PLAVEVSKI


On January 11, 2020, when Chinese scientists shared the genetic sequence of the then-novel coronavirus with the global health community, a race began to develop the best method for detecting infections in people.


Later that month, a Chinese company, BGI, launched its first PCR kit which was later approved by the World Health Organization as an emergency detection method.


Using the new technology, China was conducting 50,000 daily tests by March 2020, a figure that pales into insignificance when compared to the more than 51 million PCR tests that were carried out on average daily in 2022, according to the National Health Commission.


But in recent weeks some 12,400 firms conducting PCR tests are seeing their work dry up, something officials did not expect until spring 2023 at the earliest, according to Jiao Yahui, a member of the health commission.


Reports of irregularities and inconsistent results by one company, Nucleus Gene, and Beijing’s fresh approach to learn to live with the virus has already pushed one such firm, Pushi Medical, to bankruptcy in November.

Public buffer


In the first 10 months of 2022, 8.48% of public spending of China’s domestic budget, 1.75 trillion yuan ($250 billion), was earmarked for health, an annual increase of 12.6%.


Among the main beneficiaries of these measures, YHLO Biotech stands out, a company that was listed by Beijing as essential to the prevention and control of the pandemic.


In 2022, the biotech firm increased its income and net year-on-year profit by 326% and 648%, respectively, according to a study carried out by the state-owned media company Sixth Tone.


According to the publication, most such companies have achieved a gross profit margin of over 60%, with some such as DaAn Gene approaching 90%.


Despite the stratospheric profits, many companies are left chasing unpaid invoices, as is the case of Labway, which has 66% of its revenues pending.


In the early days of the pandemic, the central government footed the bill of relentless testing but later regional authorities were handed the growing PCR testing bills, with many unable to afford the cost.


A test at the beginning of the pandemic cost 200 yuan ($28) but tests have now dropped to 16 yuan per person.


In recent weeks, most Chinese cities have stopped forcing citizens to take PCR tests and have dropped the measure that forced residents to present negative tests to access public spaces.

Target of protests


PCR testing labs in China have been the target of public criticism for profiting from the resources invested in the country’s controversial pandemic strategy.


In late November, citizens took to online forums as well as street protests in many of China’s large cities where protesters chanted anti-PCR testing slogans.


With almost 40 million views on Weibo — Beijing’s answer to Twitter, which is censored in China — a thread titled “Where will nucleic acid testing companies go from here?” was trending on the social network last week.


“For too long an enemy more ruthless than the coronavirus has been hiding among us. None of the people who have earned money at the expense of the country must flee!” one of the most liked comments on Weibo read.EFE
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