China: Many industries suddenly prospered when they persisted in “zero-COVID”

Medical

The Chinese government has spent more than 52 billion USD (350 billion yuan) this year on testing, new medical facilities, monitoring equipment and other anti-COVID-19 measures, benefiting about 3,000 companies.

China aims to have COVID-19 testing facilities within a 15-minute walk of everyone in major cities. The world’s most populous country also continues to conduct mass testing at the slightest signs of an outbreak. Pacific Securities in Hong Kong (China) estimates that this policy creates a market worth more than 15 billion USD a year for suppliers and manufacturers of test kits.

The Chinese government pays for most of this, either through buying test kits or paying companies that manufacture the tests. Although the price of COVID-19 testing has dropped since the outbreak of the disease in early 2020, the demand for testing continues to benefit some companies.

Dian Diagnostics, one of China’s largest medical test manufacturers, more than doubled its first-quarter profit this year. The Hangzhou-based company’s revenue grew more than 60% to $690 million, with less than half of that being in COVID-19 testing services.

Shanghai Runda Medical Technology Co processed up to 400,000 COVID-19 tests a day in April, earning more than $30 million a month, according to China’s state-owned Securities Times.

Technology and construction

Dozens of surveillance and thermal imaging camera companies, such as Wuhan Guide and Hangzhou Hikvision, benefited from the Chinese government’s demand for equipment to monitor the COVID-19 status of 1.4 billion people. Wuhan Guide doubles sales in 2020 by providing fever detection cameras across China and abroad. The company’s growth slowed down last year, but is expected to pick up again this year and next.

Since March, Chinese companies and research institutes have filed at least 50 patents related to COVID-19, mainly about adapting existing surveillance cameras and platforms for close contact tracing of cases. COVID-19 and identify potential positive cases.

According to Reuters, the urgent need for hundreds of new hospitals to ease the pressure on medical infrastructure has also contributed to growth for some Chinese construction companies. Beijing-based China Railway Corporation has built field hospitals across China this year and has been particularly active in epidemic areas such as Shanghai and Changchun city. The group’s profits in the construction, manufacturing and real estate sectors have grown steadily over the past two years, with contributions from COVID-19-related construction projects. Analysts predict the group’s growth will continue over the next few years.

Some 300 field hospitals were built across China over a 35-day period from March to April, one analyst estimated, at a cost of more than $4 billion. One-third of these field hospitals were built in and around Shanghai. A Reuters review of tenders for these projects shows that the Chinese government will spend about $15 billion on new hospitals in 2022.

Remove “knots” for businesses

Shanghai on May 29 announced that “unreasonable” bans on businesses will be lifted from June 1. China’s most populous city also introduced economic support measures, including reducing some car taxes, speeding up bond issuance and approving real estate projects. Shanghai asked banks to extend loans to small and medium-sized companies totaling 100 billion yuan ($15 billion) this year. “We will fully support and organize the resumption of activities and production of enterprises in various industries and fields,” said Vice Mayor Wu Qing.

In April, Shanghai began publishing a “white list” of key manufacturers in the auto, life sciences, chemicals and semiconductor industries allowed to reopen. But many companies in this category have suppliers that are not yet open, so they still face logistical bottlenecks.

Meanwhile, Beijing allowed libraries, museums, theaters and gyms to reopen on May 29, with a limited number of people, in districts with no community COVID-19 cases for 7 days. consecutive. Fangshan and Thuan Nghia districts will end the work-from-home rule, while public transport will basically resume in these two districts and Trieu Duong district.

China’s economy showed signs of picking up pace in May after April’s plunge, but activity was weaker than last year, Reuters said. The market is expecting more supportive policies for the economy.