By Eduardo Baptista

BEIJING (Reuters – China has a ‘zero COVID’ policy that constantly monitors, tests, isolates and isolates its citizens to keep the coronavirus from spreading. This has harmed much of China’s economy but has also created booms in technology, construction, medical and other sectors.

According to analysts, the Chinese government will be spending more than $52 Billion (350 Billion yuan) on anti-COVID testing and new facilities.

Yanzhong Huang, a U.S. think-tank, said that China is seeing a boom in companies offering testing services.

China wants COVID facilities to be within 15-minutes of every person in major cities. They also continue to enforce mass testing whenever there’s a possibility of an outbreak. Pacific Securities in Hong Kong estimates that the market for providers and test makers has increased to $15 billion per year.

This vast majority is paid for by the government, which either buys test kits or pays companies to perform the tests. Although prices of tests have dropped since the outbreak of the coronavirus in early 2020 – to as little as 50 cents per test – this continuing demand has helped a number of companies.

Hangzhou’s Dian Diagnostics Group Co Ltd was more than twice as profitable in its first quarter. It is China’s most important medical test maker. Revenue jumped to more than 60% at $690million, with just under half being for COVID testing. The government almost paid the entire bill.

Rival Adicon Holdings Ltd., which had received $300 million of mostly state money to conduct COVID testing over 2020-2021, as per the financial statements, applied for an initial public listing on the Hong Kong Stock Exchange.

According to the Securities Times, Shanghai Runda Medical Technology Co Ltd claimed it processed more than 400,000 COVID test per day during Shanghai’s almost two-month-long lockdown. This generated over $30 million each month.

China is defending its “zero-COVID” policy. It claims it has saved lives and prevented its healthcare system being overwhelmed. Despite the increasing economic hardship, it shows no signs of retreating.

According to the latest data, there has been a sharp decline in economy since March. The country’s employment and consumer spending have suffered as a result of stringent restrictions that blocked highways, ports and stranded workers, and closed factories.

Private-sector economists predict that the economy will shrink from April to June this year, as opposed to the 1.8% increase in the first quarter. This year, the blue-chip CSI 300 Index fell 19%.

The boom is uncertain for Shanghai Runda companies such as Dian, Adicon, and Dian. Their fortunes are tied closely to government spending. According to analysts, Dian’s revenues will likely fall slightly in the next year. However, they expect Shanghai Runda to continue growing. Since the beginning of 2018, stocks of both companies have fallen.

According to a research note from Shenzhen-based Essence Securities, “The spread of the epidemic remains uncertain because of the many mutated strains and complexity of infectiousness.” If the epidemic spread is managed and the epidemic prevention policies are adjusted, this could have an adverse impact on market demand for COVID nuclear acid testing.

Huang from the CFR stated that China’s huge programme of locking downs, tracking and isolating might prevent worst-case scenarios but wasn’t a permanent solution. He stated that it was unsustainable both economically and epidemiologically.

Adicon, Dian Diagnostics, and Shanghai Runda declined to comment. The Shanghai Runda and Beijing Health Authorities did not respond.

MASS SURVEILLANCE, QUICK BUILDERS

Some dozens of manufacturers of thermal imaging and surveillance camera, like Wuhan Guide Infrared Co Ltd., and Hangzhou Hikvision Digital Technology Co Ltd., have seen their products in China thanks to the government’s request for gadgets that could help keep track of COVID statuses.

Wuhan Guide is one of the most prominent manufacturers of thermal imaging equipment worldwide. It doubled its revenues in 2020 after working overtime to provide fever-detecting cameras throughout China and abroad. Although growth slowed last year, analysts believe it will pick up this year and the next. The company didn’t respond to our request for comment.

The mother of invention is disease. A Reuters review of national and international databases revealed that at least 50 COVID patents were filed since March by Chinese firms and research institutes. These inventions relate to the adaptation of existing surveillance cameras or platforms to identify positive cases and track close contacts.

Some construction firms have seen a surge in business due to the urgent requirement for new hundreds of hospitals. This is because China has an already stretched medical infrastructure.

China Railway Group Ltd, Beijing, is a conglomerate which includes construction, manufacturing and real-estate. This year it has constructed makeshift hospitals across China. Over the last 2 years, its profit has increased steadily, at least partially due to COVID projects. Analysts anticipate that this trend will continue for the next several years. The stock reached an all-time high of $33 million in May. China Railway Group declined to comment on a request.

According to one analyst, 300 temporary hospitals were constructed in China between March and April as a result of rising infections. This was at a cost exceeding $4 billion.

A third were constructed in or around Shanghai. No sign that the demand is decreasing from government. Ma Xiaowei, China’s head of the National Health Commission called for construction of “permanent and temporary hospitals”. This is a reference to the long-term demand for these buildings.

A Reuters analysis of the tenders suggests that $15 billion will be spent by the government this year for new hospitals.