China's 'zero-COVID' policy of constantly monitoring, testing and isolating its citizens to prevent the spread of the coronavirus has battered much of the country's economy, but it has created bubbles of growth in the medical, technology and construction sectors.
The Chinese government, alone among major countries in vowing to eradicate the coronavirus within its borders, is on track to spend more than $52 billion this year on testing, new medical facilities, monitoring equipment and other anti-COVID measures, which will benefit as many as 3,000 companies, according to analysts.
The government is footing the bill for the vast majority of this, either by buying test kits or paying companies to do 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., one of China's biggest medical test makers.
China defends its 'zero-COVID' policy as crucial to saving lives and preventing its healthcare system from being overrun. It shows little sign of pulling back even as the economic toll mounts. Many private-sector economists expect the economy to shrink in the April to June quarter from a year earlier, compared with the first quarter's 4.8% growth. The blue-chip CSI 300 IndexInvestors are uncertain how long the boom will last for companies like Dian, Adicon and Shanghai Runda, whose fortunes are closely tied to government spending. Analysts, on average, expect Dian's revenue to dip slightly next year, while they see Shanghai Runda's continuing to grow.