Since the beginning of this year, after seemingly endless rounds of virus outbreaks, China’s cities have adopted routine nucleic acid testing for residents as a pandemic control measure.
The Chinese authorities are marketing the large-scale testing,
provided free of charge, as a shining example of upright leadership.
While the CCP authorities parrot their “concern” for the health of the Chinese public, the state medical insurance fund coffers are emptied to line the pockets of China’s most elite, public interest groups.
Battle Between Local Governments and Medical Insurance Fund
China’s National Medical Insurance Administration and three other government agencies jointly issued a notice recently, announcing that they would investigate how medical insurance funds have been used in the past two and a half years.
In addition to a routine inspection checklist, the administration will focus on inappropriate charges for nucleic acid or antigen tests to screen for COVID-19.
At the same time, the National Medical Insurance Administration notified local governments that the cost of mass COVID-19 testing is a burden not to be carried by the public’s medical insurance funds.
Needless to say, many local governments have been covering the cost of mass testing with the public’s medical insurance funds since the beginning of the pandemic.
The research team of Huachuang Securities looked into relevant regulations in Shenzhen, Qingdao, Suqian, and other cities where nucleic acid testing is the norm. The team concluded that 70 to 95 percent of the mass testing costs are being reimbursed by medical insurance, while the local governments pick up a fraction of the total cost.
Official data shows that by the end of 2021, the cumulative balance of the basic medical insurance (including maternity insurance) fund, at 3,612 billion yuan (approx. $542 billion). The balance is mainly concentrated in relatively wealthy provinces and regions with a larger population influx. (this “balance is meaningless unless we make a comparison to what it was pre-pandemic)
The Health Literacy Bureau, an information platform in China’s medical and health field, revealed in a May 26 article, that there is a risk of exhausting the medical insurance funds across the nation.
Beijing and Shanghai’s current medical insurance funds can cover the cost [of what] for more than 600 days. In densely populated provinces such as Shandong and Henan, the current funds run out after about 70 days of testing.
Chinese state media Yicai also confirmed local governments had been using the public medical insurance to pay for large-scale nucleic acid testing. As an example, the media outlet reported both Guangdong Province and Dalian city had covered testing costs using people’s collective medical insurance funds.
This indicates that local governments spent the people’s medical insurance funds minus any oversight and zero supervision.
Current affairs commentator and China expert Li Yanming explained to The Epoch Times that this happens because the CCP is a chaotic system. The medical insurance fund is not an administrative expenditure of the government, but the local governments have the power to use it for special purposes.
Costly Pandemic Control Measure
Since April this year, numerous Chinese cities, such as Shenzhen, Wuhan, and Hangzhou, have successively implemented and normalized nucleic acid testing. On May 9, the Chinese authorities called for the establishment of “15-min sampling circles,” which translates into setting up vast numbers of COVID sampling booths, meaning no resident needs to walk more than a 15-minutes, to get tested.
Analysts at Soochow Securities estimated the costly Pandemic Control Measures annual cost to be 1.72 trillion yuan (US$ 258 billion), or 1.5 percent of China’s GDP in 2021. If it continues at the same pace in 2022, it will surpass the CCP’s 2022 defense budget of 1.45 trillion yuan ($217.5 billion).
Those are conservative numbers compared to Goldman Sachs that had estimated testing 70 percent of China’s population every two days to cost $370 billion, or 2.2 percent of China’s 2021 GDP!
Elite Interest Groups
The nucleic acid testing market has expanded rapidly since the Covid-19 pandemic in 2020. According to Tianyancha, a Chinese business data and research platform: in 2021 alone, China added 437 business entities dedicated to medical testing activities.
In February this year, a leaked audio recording of Huang Wansheng, a researcher at the Harvard-Yenching Institute, circulated online. The recording revealed the Chinese regime’s elite interest groups had made a killing off the pandemic control measures, thanks to vaccinations and testing. According to insider information, one Chinese company alone had made over 670 billion yuan (about US$ 105.8 billion) from nucleic acid testing at the time. [during what time period, and across what geography?]
Commenting on Huang’s recording, Henry Wu Chia-lung, macroeconomist and Taiwan AIA Capital lead economics researcher, told The Epoch Times that in China, since power is so tightly concentrated, there are a lack of checks and balances and supervision. It is therefore very easy for the CCP elites to use power for personal gain. The elites have turned this large-scale public crisis into an opportunity to line their pockets with the public’s funds.
