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China Spent More On Mass COVID-19 Testing Than On Its Military: Research
On May 29, 2022
Recent research results from China’s financial securities firms show that the cost of the Chinese regime’s mass COVID-19 nucleic acid testing exceeded its military spending in 2021, and that it will drain China’s national medical insurance funds within three and a half years if citizens are tested every two days as required by the regime.
Mainland Chinese news portal Sina.com published the research report by the macro research team of Huachuang Securities on May 23. The report pointed out that according to unofficial statistics, combined with the changes in testing volume and unit price, since the COVID-19 outbreak, the estimated cost of nucleic acid testing has been about 300 billion yuan (about $44.7 billion), of which nearly 150 billion yuan ($22.3 billion) was spent in the first four months of this year.
The research team said the premise of the calculation is that about 80 percent of the cost of regular nucleic acid testing is borne by the medical insurance that employers pay for their employees, and about 20 percent is paid by local governments,’ at all levels, which comes from taxpayers. The Chinese medical insurance has 3.6 trillion yuan (about $533.5 billion) in funds, which is enough to cover the cost of nationwide testing of citizens every two days for three and a half years.
The Chinese communist regime ordered nucleic acid testing to be done regularly and become normalized starting May 9, and that nucleic acid “sampling circles” (testing sites) should be set up within 15 minutes walking distance in large cities.
Guo Yanhong, the supervisory commissioner of the Medical Administration and Medical Administration Bureau of the regime’s Health Commission, said at the State Council’s press conference on May 23 that Hangzhou and Shanghai have already made sampling circle layouts. Shenzhen, Dalian, Hefei and many cities in Jiangxi and Hubei have also started setting up “sampling circles.”
Henan Province announced on May 21 that every resident in the province must take a nucleic acid test every 48 hours. Meanwhile, an analysis article on Sina.com titled “A 48-hour nucleic acid test in Henan Province is expected to cost about 82.05 billion yuan for one year” attracted attention, but has since been deleted.
The research report also pointed out that according to the regulations of Shenzhen, Qingdao, Suqian, and other cities, 70 to 95 percent of the testing cost are reimbursed by China’s medical insurance, and local governments finances cover about 20 percent.
Mainland Chinese media China Business Network reported on May 25 that recently, medical insurance departments in many parts of the country received a letter from the National Medical Insurance Bureau, clearly stating that using medical insurance funds to pay for large-scale nucleic acid testing is against the medical insurance policies and should be stopped immediately.
However, if medical insurance does not cover the cost of nucleic acid testing, there will be a huge burden on the local governments’ finances. Due to the lockdowns, the fiscal revenue of more than 30 cities in mainland China declined as of April this year, says the report.
ao Chuan, chief macro analyst of Soochow Securities, published a research report earlier this month. Based on the unit price of nucleic acid testing in mainland China, he estimated that if all the major cities in China implement normalized nucleic acid testing, the monthly cost will reach 143.6 billion yuan (about $21.3 billion), or about 1.72 trillion yuan (about $255.4 billion) per year, which is 1.5 percent of China’s nominal GDP in 2021 and 8.7 percent of public revenue. The total is higher than China’s 1.37 trillion yuan (about $203.4 billion) 2021 military spending.
However, he believes that this figure is still less than the economic damage caused by the lockdowns.
Tao said that the Chinese regime may issue special bonds to cover the cost.
