As China tries to live with the virus, COVID control industries face decline

As China tries to live with the virus, COVID control industries face decline

As China tries to live with the virus, COVID control industries face decline

BEIJING, Dec 16 (Reuters) – Like most Chinese, Beijing resident Wang was happy and relieved when she learned last week that China was abandoning almost all of its anti-COVID policies. But the next day, the 43-year-old lost his job as one of the city’s many testers of COVID swabs suitable for flame retardant materials.

“The leader of our group told me personally that I was no longer needed because of the new policy,” she told Reuters, refusing to give her full name.

In the wake of unprecedented outcry over often draconian lockdowns, China’s government eased some restrictions earlier this month before abruptly abandoning most control measures, including mandatory mass PCR testing conducted across much of the country .

That U-turn meant an overnight change in fortunes for those companies and businesses involved in quarantine, COVID monitoring, and motion tracking products and services.

Industries have become big business during the pandemic and are huge employers even though it is difficult to obtain precise statistics.

Analyst estimates compiled by Reuters in May had put China’s planned COVID-related spending this year – of which these industries formed a large part – at about $52 billion.

Some less conservative estimates had even put this year’s potential cost of mass testing alone – with commuters in big cities requiring negative tests every one or two days – at 1.5% to 1.8% of product China’s gross domestic – more than Qatar’s GDP.


In the past two weeks, more than 30 local governments have canceled tenders for services and products related to COVID control, a Reuters tender review showed.

These included a tender to regularly disinfect a quarantined hotel in Shenzhen, one for lockdown supplies for a sub-district in Chengdu and one to renovate a COVID testing laboratory in Shandong province.

Some have also abandoned plans to buy software that tracks the spread of COVID or alarms for people’s locked doors to monitor whether they’ve left their homes.

“According to national policy and the changes in the epidemic situation, the buyer now terminates the nucleic acid sample distribution service project in Gongshu District, Hangzhou,” an announcement posted on Tuesday read, referring to PCR testing.

Companies that have reaped huge profits from mass PCR testing have seen their shares slip this month. Shanghai Labway Clinical Laboratory (301060.SZ) fell 11%, Guangdong Hybribio (300639.SZ) fell 8% while Dian Diagnostics Group Co Ltd (300244.SZ) lost 5%.

The companies did not respond to Reuters requests for comment.

How painful China’s dismantling of its COVID control infrastructure will be for companies and their staff remains to be seen.

Over time, a return to more normal economic activity should help more people find work. Local governments are also expected to divert resources to cope with COVID.

China’s new vaccine push focused on the elderly could provide jobs for fired testers, while local authorities could hire staff to support vulnerable or elderly residents who stay at home, said Alicia Garcia-Herrero, chief economist for Asia Pacific at Natixis.

“All the money that went into mass testing, it’s not just going to disappear. When you increase expenses like this, it’s hard to reduce it.”

Wang, who had only gotten her job testing swabs less than three weeks before she was fired, said it was annoying to be looking for a job again. But she didn’t seem to mourn the loss of the job that meant walking for hours on end in a sweaty hazmat suit while she dealt with grumpy residents.

“At least the economy will improve with these changes, so it will be easier for me to find a job,” she said.

($1 = 6.9605 Chinese Yuan)

Reporting by Eduardo Baptista; Editing by Brenda Goh and Edwina Gibbs

Our standards: the Thomson Reuters Trust Principles.

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