Who are the biggest corporate winners from the country’s draconian pandemic strategy?
Save time by listening to our audio articles as you multitaskRegardless, on May 6th the Politburo’s Standing Committee doubled down. China’s highest decision-making body vowed to fight against “any words or actions that distort, doubt or negate” Mr Xi’s crusade to quash covid-19. Gone was language like “reconciling zero-covid with growth” and “minimising the impact of the pandemic on the economy”, which sought to balance covid-control with economic growth. The stockmarket shuddered.
Prospects for this zero-covid industrial complex indeed look bright. Covid testing is moving from makeshift tents on street corners into a network of semi-permanent kiosks where residents will be tested regularly for the foreseeable future; Shanghai alone will build 9,000 of them. In big cities tens of millions of people may have their throats or nasal passages swabbed every 48 hours. An analyst at Soochow Securities, a local broker, says that testing at this pace will cost China about 1.
The testing frenzy is minting covid tycoons. Liang Yaoming, founder of Guang zhou Kingmed Diagnostics, which also makes tests, has become a billionaire during the pandemic. The value of shares in, a $4bn biosciences darling, held by its founder, Wang Jian, has shot up by more than $300m since 2019 to about $2bn. Chen Haibin’s 26% stake in Dian Diagnostics is worth just shy of $1bn.
Some voices have raised concerns about the rise of covid-related big business. Guan Qingyou, an economist at the Xinrui School in Beijing, recently warned of the risk of special-interest groups “misleading and kidnapping” public policy on the pandemic. They could eventually create something akin to America’s military-industrial complex, he said in a post on Chinese social media, which has since been deleted.
Mr Guan may be on to something. Zhong Nanshan, China’s leading respiratory-disease expert, has promoted Yiling’s traditional Chinese medicines used to treat covid-19 while maintaining undisclosed links to the company, thehas reported. More egregiously, the chief representative of a subsidiary of Guang zhou Kingmed Diagnostics was arrested earlier this year on suspicion that he was trying to spread covid in order to benefit his business. Not quite what the Politburo ordered.
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