China coronavirus: mass-testing push could cost 1.7 trillion yuan a year if rolled out across country

Dalian and Zhengzhou are the latest municipalities to announce full-scale testing efforts beginning this week, and more may follow after end of Labour Day holiday

Additional costs are expected to put further pressure on local authorities and municipal coffers that are already being strained by measures to boost China’s slowing economy

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Local residents line up to be tested for the coronavirus in Dalian, Liaoning province, where local authorities say large-scale testing will be conducted weekly, from Thursday. Photo: Getty Images

Published: 8:30pm, 4 May 2022Updated: 8:31pm, 4 May 2022

As more and more Chinese cities implement regular coronavirus testing, there are indications that a nationwide roll-out of mass testing in all first- and second-tier cities could cost China 1.5 per cent of its entire 2021 gross domestic product this year.

Municipal authorities in the northeastern port city of Dalian, in Liaoning province, announced on Tuesday that full-scale testing will be conducted every week, starting from Thursday.

And the central logistics hub of Zhengzhou, in Henan province, also said on Tuesday that it would be carrying out three rounds of testing in downtown areas until Friday.

They join a growing list of local municipalities that have pushed for more frequent testing in the face of resurgent domestic outbreaks, following similar moves in the capital Beijing, as well as in the southern manufacturing and technology heartland of Shenzhen and the eastern city of Hangzhou.

The practice of regular mass testing is likely to be vastly extended across the country after the five-day Labour Day holiday that ends on Wednesday, in an effort to better coordinate virus-control efforts, per Beijing’s instructions, according to Tao Chuan, chief macro analyst at Soochow Securities.

If all of China’s first- and second-tier cities, with roughly 505 million residents, implement a year’s worth of mass testing, the cost could top 1.7 trillion yuan (US$257 billion), which would be about 1.5 per cent of China’s 2021 GDP, or about 8.7 per cent of last year’s public fiscal revenue, Tao said.

And he warned that the additional cost will put further pressure on local authorities and municipal coffers, which are already being strained due to the implementation of tax cuts and increased infrastructure spending to boost China’s slowing economy.