Experts estimate China costs 215 billion USD for mass testing

Testing for COVID-19 in Beijing on May 3 – Photo: REUTERS

On May 3, the government of Dalian city, Liaoning province announced that it would conduct mass testing weekly, starting from May 5.

On the same day, Zhengzhou city, Henan province also announced that it would conduct mass testing 3 times in central areas.

Meanwhile, 12 out of 16 districts in Beijing will conduct three more tests in just three days, from May 3 to 5. This city of 22 million people is relying on mass testing to identify and isolate cases, to avoid a blockade like Shanghai.

According to Tao Chuan, a macro analyst at Soochow Securities and Financial Consulting Company (based in Beijing), if all the first and second tier cities of China (about 505 million people) mass testing in a year, the cost could reach 1.7 trillion yuan (US$257 billion), equivalent to 1.5% of GDP in 2021.

The cost will put pressure on local governments, already strained by tax cuts and increased infrastructure spending aimed at boosting China’s slowing economy, Tao Chuan warned.

“The cost of more than 100 billion yuan (US$15 billion) per month for testing is not small,” the newspaper said SCMP quoted Mr. Tao Chuan. “In addition to letting people bear part of the cost, issuing treasury bonds is also a possible way to offset costs.”

Beijing is sticking to its “zero-Covid” policy in the context that the whole country is facing the biggest wave of epidemics since 2020.

However, economists warn that strict epidemic prevention measures are hindering the country’s ambitious GDP growth target of around 5.5% for 2022.

Also on May 3, credit rating agency Fitch Ratings reduced China’s 2022 economic growth estimate from 4.8 to 4.3%.

China, although still sticking with “zero-Covid”, has directed to adjust it “in line with new features in virus transmission”, to “minimize the impact of outbreaks on the health of the virus”. economic and social development”.

According to expert Tao Chuan, although not the best solution, regular testing is still a less expensive solution than blockade. Mr. Tao estimated monthly losses could reach 156.8 billion yuan ($24 billion) if the country’s biggest cities like Shanghai were to close for two weeks.

According to the National Health Commission, as of mid-April, China has about 13,100 COVID-19 testing agencies and daily testing capacity of 51.65 million samples.

Last month’s financial results showed that some of the major COVID-19 testing companies in China recorded huge annualized profits in the first quarter, up from 58 to 190%.

People in Beijing are tested 3 times in 3 days in a row

TTO – 12 out of 16 districts in Beijing will conduct 3 more tests from May 3 to 5. This city of 22 million people is relying on mass testing to identify and isolate cases, to avoid a blockade like Shanghai.