Chinese Covid testing firms come under fire for pandemic profiteering

In another case of trouble relating to China's Covid controls, a testing facility in Lanzhou - a subsidiary of a Shenzhen-based company - is suspected of errors in Covid test results, with a public outcry following a report filed by the local authorities on 25 November.

This Shenzhen company was revealed to have registered as many as 16 subsidiaries within three months. With seeming outbreaks in every region where the company has a presence, netizens began suspecting some form of collusion between the local government and the company.

Academics Zaobao spoke to said that the government would now regard strict oversight of testing facilities as an immediate priority, as inconsistencies in testing might spark more public complaints and discontent about pandemic "profiteering" and public confidence would plummet further.

According to a report by the Lanzhou Health Commission, the health codes of some infected residents in Qilihe district showed negative results while they were being transferred for quarantine on 24 November.

Following investigation, it was found that Lanzhou Nucleus Huaxi Laboratory erroneously reported some positive test results as negative, causing confusion. The Lanzhou authorities have said they will deal severely with the laboratory.

The laboratory's parent company Shenzhen Nucleus Gene Technology Co. has been on Weibo's top searches over the past few days. This ten-year-old company has been revealed to have expanded rapidly over the past two years, and registered as many as 16 medical testing laboratories in the past three months.

Currently, there are 35 "Nucleus Huaxi" testing laboratories in China, including the one in Lanzhou, all overseen by founder Zhang Hezi and his daughter Zhang Shanshan.

Netizens found that Covid outbreaks in various places coincided with Zhang Shanshan's establishment of testing facilities, including Beijing, Shenzhen, and Zhengzhou: "Wherever her company is, there will be outbreaks."

One netizen questioned if the company was profiteering by posting this criticism: "If the ones selling umbrellas are given the right to make it rain, would the rain ever stop?"

As for rumours that Zhang Hezi and Zhang Shanshan are descendants of China's first nuclear commander General Zhang Yunyu, the general's son and head of armaments for the Beijing garrison Zhang Lütian said on Weibo that this was fake news and that a police report had been made.

Based on estimates by Chinese media, in the last two and a half years, Nucleus Huaxi laboratories in Jinan, Shenzhen and other areas have been fined 12 times, with fines totalling 107,000 RMB (roughly US$15,000).

Chinese Covid testing firms have recently come under fire for pandemic profiteering.

Several testing firms have gone public this year, including Jiangsu CoWin Biotech Co., which saw a profit growth of 68% last quarter. Data from OFweek (维科网), a high-tech industry portal, shows that the ten largest listed testing firms in China had a combined net profit of 16.3 billion RMB as of the end of June. Shenzhen Nucleus Gene Technology Co. has also launched its IPO process.

A commentary published in People's Daily on 29 November warned that China's Covid testing chaos could only be stemmed by imposing harsh punishment. It added that the numerous cases of fraud have not only made epidemic prevention and control more difficult, but also dealt a big blow to the credibility of nucleic acid tests.

Guo Yanhong, director of the National Health Commission's health emergency division, said at a news conference on 29 November that testing firms in Beijing, Hefei, Shijiazhuang and other areas have been punished for wrongdoing this year, with some even facing criminal charges. Vowing to strengthen the regulation of testing firms, she said that crimes such as issuing false nucleic acid test reports would be dealt with in a stringent manner in accordance with the law and regulations.

Professor Tang Renwu, head of the School of Government at Beijing Normal University, told Zaobao that false Covid test results put people in a state of "extreme fear and anxiety" because of the fear of being implicated and transferred to a centralised quarantine facility.

Tan Gangqiang, head of a psychology consultation centre in Chongqing (重庆市协和心理顾问事务所), told Zaobao that China's increasing pandemic fatigue and public dissatisfaction with Covid chaos could lead to more radical and anti-social behaviour. He also urged the authorities to adjust its policies to address public sentiment.

Tang believes that the most pressing task ahead is to strengthen the supervision of testing firms so as to deter them from falsifying Covid test results for the sake of profit. At the same time, authorities should also "get to the bottom of" the Covid testing chaos to "give an explanation to the people".

This article was first published in Lianhe Zaobao as "深圳一企业开设 三个月注册16子公司 兰州核酸检测机构异常信息报阴干扰防疫".

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