After three years of implementing the extreme epidemic “dynamic zeroing” policy, the Chinese Communist Party (CCP) has severely damaged the Chinese economy. However, industries related to epidemic prevention have greatly profited from it, with many nucleic acid testing institutions that made money during the epidemic now falling into financial distress.
Following the outbreak of the CCP virus (novel coronavirus), the CCP’s extreme epidemic prevention measures for over three years have resulted in economic downturn across various sectors. However, vaccine companies and nucleic acid testing institutions throughout China have reaped huge profits during the epidemic. Companies like Kingmed Diagnostics, Daan Health, BGI Genomics, and Biotest Biotech saw their profits skyrocket before the epidemic restrictions were lifted, with some experiencing profit increases of over 3,000%.
But as the CCP lifted the zero-COVID measures at the end of 2022, these testing institutions all found themselves in financial distress.
On May 4th, Jiemian News reported that after the wave of profits from COVID testings receded, both companies providing nucleic acid testing and those producing antigen testing reagents saw significant declines in revenue and net profits in 2023.
According to the financial report released by nucleic acid testing institution “Saint Xiang Biology” for 2023, their revenue reached 1.007 billion yuan, a decrease of 84.39% year-on-year. Daan Health’s revenue for 2023 was 1.181 billion yuan, a decrease of 90.20% compared to the previous year.
At the same time, layoffs became a common choice for nucleic acid testing companies. In 2023, Saint Xiang Biology laid off 561 employees, leaving a total of 2006 employees. Daan Health, on the other hand, laid off 1612 employees, reducing their workforce to 2006 employees.
Third-party laboratories involved in testing also faced challenges.
Daan Health announced a net profit of 307 million yuan in 2023, a decrease of 78.56% year-on-year, while Kingmed Diagnostics announced a net profit of 643 million yuan, down by 76.64% compared to the previous year.
Both Daan Health and Kingmed Diagnostics massively expanded their workforce in response to the demand for nationwide nucleic acid testing during the epidemic, only to significantly downsize their workforce now. In 2023, Daan Health laid off 2285 employees, while Kingmed Diagnostics’ subsidiary laid off 2825 employees.
After the normalization of nucleic acid testing, many related companies also faced financial difficulties.
In 2023, Daan Health had accounts receivable of 2.063 billion yuan, a decrease of 49.50% year-on-year, with bad debts amounting to 651 million yuan. Saint Xiang Biology had accounts receivable of 692 million yuan, down by 46.67% year-on-year, with bad debts exceeding 83.06 million yuan. Daan Health and Kingmed Diagnostics had bad debts of 371 million yuan and 885 million yuan, respectively.
Numerous disputes between upstream and downstream companies in the testing industry have occurred for financial reasons. For instance, in 2023, Daan Health took four third-party testing institutions to court, claiming that “some companies have deregistered or gone bankrupt, and they hope to recover their accounts receivable through court enforcement.”
Following the outbreak of the CCP virus (novel coronavirus) in Wuhan, China, at the end of 2019, the CCP implemented extreme zero-COVID measures nationwide, requiring mandatory nucleic acid testing for all residents as part of epidemic prevention.
People across the country were required to provide negative nucleic acid test certificates within 24 or 48 hours to enter various venues. Without a testing certificate, individuals were not allowed to work, shop at supermarkets, or even leave their residential areas. The frequent testing resulted in substantial profits for testing institutions involved.
Apart from testing institutions, vaccine companies in mainland China also profited significantly from the epidemic. For instance, the annual report of Sinovac in 2021 showed a net profit of 14.458 billion US dollars. Converted to Chinese yuan, their total revenue was 128 billion yuan, equivalent to a daily income of 350 million yuan. Yet, all production of Sinovac’s COVID-19 vaccine was halted in January of this year.
According to Reuters, in 2022, the CCP spent over 350 billion yuan on virus testing, new medical facilities, monitoring equipment, and other measures in the fight against the epidemic, creating a profitable control industry chain with up to 3,000 companies benefiting from it.
The CCP also constructed hundreds of isolation centers and temporary hospitals across the country, many of which remained unfinished after the end of the epidemic.
The three-year extreme zero-COVID measures have led to economic decline in China, with people struggling to make ends meet, and secondary disasters continuously unfolding nationwide. To this day, China’s economic recovery remains bleak, and unemployment rates remain high.
Many of the “COVID heroes” who participated in epidemic prevention measures have lost their jobs since the epidemic restrictions were lifted, leading to protests where they demanded overdue wages from authorities, only to face repression and silencing.
The CCP’s mandatory vaccination of the Chinese people with domestically produced vaccines like Sinovac and Sinopharm, as well as frequent nucleic acid testing, has resulted in many individuals suffering from various post-vaccination symptoms, causing unbearable pain.