China has developed the capacity to produce enough Covid-19 test kits to screen 51 million people daily, providing “strong” logistical support to pandemic control measures, according to the country’s drugs and medical devices regulatory body.
The National Medical Products Administration (NMPA) said it had approved 68 Covid-19 test products by the end of last year – including reagents for 34 PCR (polymerase chain reaction) tests, 31 antibody tests and three antigen tests.
“The [testing] capacity has reached 51.3 million per day. It has provided a strong guarantee to the [national] pandemic control work,” the NMPA said in its annual report for 2021.
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Regulators were also assessing how well the approved tests performed in detecting new Covid-19 variants, to make sure they were sensitive enough for future strains, the recently released report said.
This comes as China steadfastly insists on what it calls a “dynamic zero- tolerance” approach to Covid-19, even though most of the world has shifted to living with the virus, with Sweden going so far as to declare the pandemic over.
Chinese authorities mobilise huge amounts of resources and manpower to carry out mass tests each time an outbreak is reported.
This could sometimes mean repeatedly testing millions of people within a few days, and extreme measures such as area or even citywide lockdowns, and strict quarantining to cut off local transmission chains.
For example, the northern port city of Tianjin ran several rounds of tests for all its 14 million residents within days of detecting an Omicron cluster in January.
Many regional authorities require coronavirus-negative proof to allow entry, with travellers asked to pay for their tests. During the annual Lunar New Year travel peak starting last month, local governments requested negative test results from migrant workers and others wishing to return to their hometowns for family reunions.
What such a stringent approach does is create a huge demand for Covid-19 test kits. Unlike Western countries, which are increasingly resorting to home testing kits, mainly rapid antigen/lateral flow tests, China insists on the more accurate PCR tests – regarded as the gold standard of coronavirus diagnosis.
The ballooning market had spelt a windfall for many companies producing the kits, particularly in 2020 – the first year of the pandemic – and as the surge continued early last year, until Beijing ordered a cut in procurement prices and testing fees at hospitals or clinics.
Many suppliers of test kits also operate laboratories to run the tests, or act as third-party collaborators for the government to collect samples.
Listed companies like Jiangsu Bioperfectus, and Wuhan Easy Diagnosis, which supply PCR tests, saw their profit more than double last year from 2020, according to the China Securities Journal.
Another player, Dian Diagnostics Group, estimated underlying profit for 2021 to grow between 44 and 61 per cent, by up to 1.19 billion yuan (US$18.7 million).
However, profit margins for Covid-19 test and reagent suppliers were trimmed after repeated government orders last year to lower procurement prices as well as voluntary testing charges for members of the public.
BGI Group, a supplier of test reagents and operator of mobile labs, recorded over 825 per cent growth in underlying profit in 2020, mainly due to robust demand for Covid-19 tests.
But its 2021 report estimates underlying profit for the group’s listed arm to drop by well over a third, attributing the slide partly to price cuts for reagents and tests.
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In December, a PCR test in Beijing cost 40 yuan, down from 60 yuan in September. In early 2020, a test could cost as much as 180 yuan, coming down to 120 yuan in June after the government ordered price cuts.
Local governments usually procure supplies through a bidding process. Different governments will sometimes come together to buy in bulk and ask suppliers to offer the lowest price.
For example, when disease control and prevention centres and hospitals in 11 provinces – including Guangdong, Jiangxi, Henan and Hunan – formed an alliance to procure 93 million test kits in April last year, the offer price went as low as 5.3 yuan per kit.
However, some industry practitioners are concerned that excessive price reductions could sacrifice product quality.
BGI Group and other players have also turned to overseas markets in view of the market potential, including for the rapid antigen tests that are seldom used in China, especially as some Chinese-made test kits have been approved by regulators in the West.
There have also been reports of testing-related misconduct in China, especially amid immense pressure for operators to test large numbers of people and produce results within a short time.
Last month, a regional manager for the Zhengzhou Kingmed Clinical Laboratory Centre, a subsidiary of the listed Guangzhou-based KingMed Diagnostics Group, was detained for “committing acts that caused the spread of the coronavirus or seriously increased the danger of spreading it”.
No details were offered on the nature of the misconduct.
More from South China Morning Post:
- Coronavirus in China: travel restrictions should continue to avoid a resurgence, researchers say
- Sweden declares Covid-19 pandemic over, despite warnings from scientists
- Chinese scientists ‘invent Covid-19 test that gives result within 4 minutes’
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