China’s medical testing sector scales down with pandemic peak in rear-view

Name: Beijing closes some Covid testing booths as China enters new phase of pandemic controls
Uploaded: 2024-05-16T22:30:17.000Z
Duration: 3 min 44 s
Description: Beijing closes some Covid testing booths as China enters new phase of pandemic controls

Laboratories and diagnostics units of hospitals are reporting steep drops in revenue and staff lay-offs as end of pandemic slashed demand for testing

Domestic companies, most smaller than their international counterparts, looking for new growth areas after winddown of zero-Covid testing protocols

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China’s medical diagnostics industry is determining its next steps after a pandemic-induced boom has evaporated. Photo: Reuters

Mandy Zuoin Shanghai

Published: 6:30am, 17 May 2024

In the last year, Henry Zhu has had to say goodbye to dozens of colleagues.

His employer, an independent clinical laboratory in Shanghai, has drastically scaled down its workforce as a Covid-induced boom has waned and demand for testing services has plummeted.

The lab's current team is just a third of what it was in the pandemic peak, and pay for certain diagnostics – particularly the polymerase chain reaction tests which became an inescapable part of life for Chinese people during the pandemic – has shrunk by the same level.

“[We had] one product that was selling like hot cakes, and now it’s all passed,” said Zhu, a senior sales manager who has been less affected than his former coworkers.

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Beijing closes some Covid testing booths as China enters new phase of pandemic controls

While similar ups and downs could be observed in the global diagnostics market, the past few years have been a much more tumultuous affair for players in China – a country which devoted more resources than any other to near-universal testing protocols as part of its zero-Covid policy.

China’s diagnostics companies – mostly small in size and controlling only half the share of the domestic market – thrived in recent years but are now reporting huge declines in revenue and profit, according to annual reports released in the last month.

KingMed Diagnostics, a major clinical laboratory, reported a drop of 76 per cent in net profit and 45 per cent in revenue last year from 2022, while its employee headcount was reduced by 20 per cent.