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As mass Covid testing becomes China’s new normal, ensuring accuracy and fighting fraud in a booming industry are among the many challenges ahead

By Peng Danni , Yuan Suwen Updated Aug.1

A tester works at a medical lab in Beijing

China’s Covid-19 prevention requires improved monitoring and early warning systems to address Omicron variants, warned Vice Premier Sun Chunlan on May 9 during a State Council teleconference. She said major cities should set up Covid testing stations within a 15-minute walk of all communities as the central government sees regular nucleic acid testing as an effective tool for China’s zero-Covid approach and to avoid long-term lockdowns.  

Three provinces and 28 cities have adopted regular nucleic acid testing as of May 14, covering 420 million people, or some 29 percent of China’s total population.  

In Beijing, over 200 rounds of regional nucleic acid testing have been carried out across 12 districts since the Omicron outbreaks in late April. In May, when the capital, along with other major cities, required residents to provide proof of a negative Covid-19 test taken within 48 or 72 hours to access public transportation and public spaces, testing institutions popped up overnight.  

However, challenges such as efficiency, fraud and cost continue to strain local governments nationwide. 

New Normal 
From February to March, Omicron hit the coastal city of Shenzhen, Guangdong Province. When 86 cases were detected on March 13, authorities mandated a weeklong city lockdown and three rounds of citywide testing. After the lockdown, Shenzhen announced no new community transmissions outside restricted areas and daily life for the most part returned to normal. 
Lu Hongzhou, head of the Shenzhen public health expert group and president of Shenzhen Third People’s Hospital, said regular nucleic acid testing reduces the possibility of hidden transmission for major outbreaks of highly contagious Covid-19 strains like Omicron and its variants. Lu emphasized that according to Shenzhen’s experience, regular nucleic acid testing can prevent cluster cases and continued spread.  

In May, Shenzhen set up 3,500 nucleic acid testing sites across the city for some 17.56 million residents, around one site for every 5,000 people.  

Tang Jinling, emeritus professor of epidemiology at the Chinese University of Hong Kong told NewsChina: “I think that under the zero Covid policy, regular nucleic acid testing is necessary, because there is no better way to attain that goal.”  

Prior to frequent mass testing, an Omicron carrier would be detected seven days after infection, resulting in up to 13 additional cases, according to Huang Senzhong, a professor at the School of Statistics and Data Science at Tianjin’s Nankai University. Now, detection is four days, bringing the number of contacts down to three.  

Zhang Wenhong, China’s top virologist at Huashan Hospital affiliated with Fudan University in Shanghai, wrote in late May that frequent testing can reduce the speed of transmission, and China may have to continue the practice for “quite a long time.” 

Masked Issues 
Regular testing of millions of people poses tremendous challenges. Beyond setting up testing stations and allocating equipment, many public health experts told NewsChina that the greater difficulty is the speedy recruitment and training of personnel this requires.  

Mass testing has spurred a new industry. According to National Health Commission data, there are some 13,000 laboratories qualified to conduct Covid-19 nucleic acid testing nationwide employing 153,000 certified technicians. Third-party testing firms are springing up to fill shortages, and governments are fast-tracking their approvals.  

A new testing firm that opened on April 26 was licensed by Chaoyang District Health Commission in Beijing to conduct nucleic acid tests on May 3. In response to public concern over the hastened approval, the Commission cited the huge gap in the nucleic acid testing capacity amid the sudden Omicron outbreak.  

According to reports, health inspections of 59 medical laboratories in Shanghai revealed more than 50 violations, such as unqualified testing personnel and substandard testing procedures.  
At least 750,000 new testing sites will open nationwide to meet demand in urban areas, requiring at least one million testing personnel, according to a report on the Covid testing industry by newspaper Shanghai Securities on May 9.  

After nearly 200 third-party testing firms were contracted to conduct regular testing in Beijing, problems soon emerged. Some were caught cutting corners and faking test results. By the end of May, Beijing police had investigated three nucleic acid testing agencies for violating regulations and criminal misconduct.  

Among them, Pu Shi Medical had its operating license revoked on May 20 after health authorities in Beijing’s Fangshan District discovered the lab had released more results than conducted tests. One week later, three local officials in Fangshan including Yang Daqing, deputy director of the Fangshan District Health Committee, were placed under investigation.  

According to official public statement, the other two labs – Zhong-tong Lanbo and Jinzhun Medical – allegedly mixed more swab samples than is prescribed in one tube to cut costs. Artificial dilution of samples affects the accuracy of test results, which risks further spread. 
Zhang Jun, a technician at a large genetic testing institution in China, told NewsChina that official regulations require one tube per person for nucleic acid testing, and batch testing, where 10 samples from multiple individuals are mixed and tested together, reduces the costs of mass testing. However, batch testing must follow national standards. 

Dynamic Testing 
Local governments face a slew of decisions to tailor that system, such as locations of test sites, how many people they should serve, how many samples they should collect daily, and consider differences in logistics for rural and urban areas.  

During a press conference on May 23, Guo Yanhong of the National Health Commission said there is no one-size-fits-all model. Not all cities need to set up testing stations within a 15-minute walk, an approach suited for provincial capitals with high imported infection risk and cities with over 10 million people, Guo said.  

As for testing frequency, Tang said proper timing and adequate density are most important, but other requirements should be location specific. For example, while most city residents are required to provide a 48-hour or 72-hour negative test result to enter public spaces, staff in high-risk areas such as hospitals and airports should be tested daily.  

Tang Jinling added that 24-hour testing is already the most stringent requirement for early detection available, as the virus only has 24 hours to spread, making it easier to trace.  

Lu Hongzhou told NewsChina that two-day nucleic acid screening is already enough for the general public. For any infectious disease, if no new cases occur within two incubation periods – a period being the average time it takes for symptoms to show after contact – life should return to normal. “The average incubation period for Omicron is three days, and the longest incubation period reported so far is five to seven days. So, taking the worst-case scenario of seven days, the longest time needed to contain the outbreak is 14 days. After that, general nucleic acid testing can cease.” But he stressed that effective vaccination and anti-virus drugs are the only way to stop regular testing.  

At a press conference on June 9, Chinese health officials noted that low risk areas and groups do not need frequent testing. 

Footing the Bill 
According to research conducted by Huachuang Securities, nationwide nucleic acid testing has so far cost 300 billion yuan (US$44.9b). Twenty billion tests were conducted nationwide during the first four months of 2022, amounting to an average of 15 tests per person and costing 150 billion yuan (US$22.5b).  

The cost of regular testing has decreased. On May 22, the National Healthcare Security Administration (NHSA) and other health authorities required testing institutions to cap costs for batch testing at 3.5 yuan (US$0.5) per person.  

This is the fourth round of price cuts ordered by the NHSA in the past two years. Considering the enormous number of tests, however, costs add up quickly.  

While nucleic acid tests remain free for the public, it is unclear who ultimately pays for them. Huachuang Securities reported that about 80 percent of nucleic acid test costs are covered by public health insurance funds, while local budgets cover about 20 percent.  

But as NewsChina learned, except for a few provinces such as Guangdong, the costs for mass nucleic acid tests are covered entirely by local budgets.  

On May 25, China Business News reported that the NHSA notified 31 provinces, autonomous regions and municipalities that medical insurance does not cover mass testing and required local governments to adjust their policies. The next day, an NHSA spokesperson told State-run China Central Television (CCTV) that local financial authorities must shoulder the costs.  

Nucleic acid testing is a considerable burden on local budgets and requires sustainable ways to keep them funded. At the 3.5 yuan rate, regular testing in Henan, a province with around 99.36 million permanent residents, costs about 5.2 billion yuan (US$800m) per month, which amounts to 62.6 billion yuan (US$9.3b) annually. This accounts for up to 9.5 percent of the province’s annual fiscal revenue.  

Third-party testing firms are not winning out either. As the per person price for testing continues to fall, nucleic acid testing promises large volume but thin profit margins. Some third-party firms face delayed payments and take on debt to maintain operations.  

Also, regular nucleic acid testing has other hidden costs, such as the time people spend taking them and the mental and physical stress on personnel and the general population.  

Zhang Jun said the testing industry boom will not last long. “As the tide ebbs, many companies will face losses,” he added.