Inside China’s race to sell coronavirus testing kits to the world

As the horror of the coronavirus outbreak in China was unfolding over January’s Lunar New Year holiday, a group of technicians were holed up in a Nanjing facility with a supply of instant noodles, working long hours to develop testing kits for diagnosing the virus.
Already at that point, the coronavirus had ripped through the city of Wuhan and was spreading rapidly around China. A handful of diagnostic tests had already been approved by the central government in Beijing, but hundreds of firms in China were still scrambling to develop new ones.
“I did not think about applying for approvals in China,” said Zhang Shuwen, founder of Nanjing Liming Bio-products. “The application takes too much time. When I finally get the approvals, the outbreak might already be finished.”
Instead, Zhang is part of a legion of Chinese exporters selling testing kits to the rest of the world amid the rapid spread of the pandemic outside China, where the outbreak is now increasingly under control, leading to a fall in domestic demand.
In February, he applied to sell four testing products in the European Union, receiving official CE accreditation in March, meaning they complied with health, safety and environmental standards set by European regulators.
Now, Zhang has an order book brimming with clients from Italy, Spain, Austria, Hungary, France, Iran, Saudi Arabia, Japan and South Korea.
“We have so many orders now that we are working until 9pm, seven days a week. We are considering working 24 hours a day, asking workers to take three shifts every day,” Zhang said.
It is estimated that more than 3 billion people are now on lockdown across the world, with the global death toll from coronavirus surpassing 30,000.
Infection hotbeds have exploded across Europe and the United States, with the epicenter shifting out of Wuhan in central China to Italy, then Spain and now New York.
The chronic shortage of testing equipment means that rather than being diagnosed, potential patients considered “low-risk” are being asked to stay at home.
A senior executive at the BGI Group, China’s largest genome sequencing company, who spoke under the condition of anonymity, said:
“At the start of February, about half of our testing kits were being sold in China and half abroad. Now, there are almost none being sold domestically. The only ones we sell here now are for passengers arriving from outside [China] who need to be tested.”
At the start of February, BGI was making 200,000 kits a day out of its plant in Wuhan, the original epicenter of the outbreak. The plant, with a “few hundred” workers, was kept running 24 hours a day while most of the city was closed.
Now, he said the company is producing 600,000 kits per day and has just become the first Chinese company to gain emergency approval to sell its fluorescent real-time polymerase chain reaction (PCR) tests in the US.
Chinese-made testing kits are becoming a more common presence throughout Europe and the rest of the world, adding a new dimension to the roaring debate about dependence on medical supplies from China .
Not all of these forays into the European market have been a success. China exported 550 million face masks, 5.5 million testing kits and 950 ventilators to Spain for $481 million earlier in March, but concerns were soon raised over the quality of the testing products.
Last week, Spanish newspaper El País reported that antigen testing equipment from the Shenzhen-based firm Bioeasy Biotechnology only had a 30% detection rate for Covid-19, when they were supposed to be 80% accurate. Bioeasy, it emerged, was not included on an approved list of suppliers offered to Spain by China’s Ministry of Commerce.
Bioeasy subsequently denied that the equipment was faulty, suggesting instead that the Spanish researchers had not correctly followed instructions.
Filipino authorities also said on Saturday that they had discarded testing kits imported from China, claiming they had only a 40% rate of accuracy.
“I guess, given the desperate situation, maybe the focus is now on speed, and maybe the process has not been that thorough,” said a European Union source, who asked not be named.
“But this should be a rude awakening not to give up on quality control, or we will be throwing precious scarce resources out of the window and bringing further weaknesses to the system, allowing the virus to expand further.”
The more complex PCR test tries to find genetic sequences of the virus by deploying primers – chemicals or reagents which are added to test if a reaction occurs – that attach to the targeted genetic sequences.
The so-called “rapid testing” is also carried out with a nasal swab, and can be done without the subject leaving their car. The sample is then quickly analyzed for antigens that would suggest the virus is present.
Leo Poon, head of public health laboratory sciences at Hong Kong University, said PCR testing is “much preferable” to antibody or antigen testing, which can only detect coronavirus once the patient has been infected for at least 10 days.
However, PCR tests are far more complex to develop and manufacture, and, with an acute global shortage of quality testing equipment, countries around the world are stocking up on the more straightforward format.
Increasingly, governments are turning to China, which, along with South Korea, is one of the few places in the world with testing kits still available.
On Thursday, Irish airline Aer Lingus announced that it would send five of its biggest planes to China each day to pick up medical equipment, including 100,000 test kits per week, joining a host of other nations repurposing commercial aircraft as jumbo medical delivery vessels.
But it has been suggested that even with such a push, China could not meet all of the world’s demand for test kits, with one vendor describing total global demand as “infinite.”
Huaxi Securities, a Chinese investment firm, last week estimated the global demand for test kits at up to 700,000 units per day, but given that the lack of tests has still resulted in almost half of the planet implementing draconian lockdowns, this figure seems conservative.
And given the fear over virus carriers who do not show symptoms, in an ideal world, everyone would be tested, and probably more than once.
“Once the virus became uncontained, I’m not sure the world, even if fully organized, could have been tested at the levels people want to test at,” said Ryan Kemp, director of nucleic acid solutions at Zymo Research, an American manufacturer of molecular biology research tools.
The company has pivoted “100% to supporting the Covid-19 effort, literally mobilizing the entire company to support it.”
Song, at the China Association of In Vitro Diagnostics, estimated that if you combined the capacities of the firms licensed in China and the European Union, enough tests could be made each day to serve 3 million people with a mixture of PCR and antibody tests.
On Monday, US President Donald Trump said more than 1 million people had been tested in America.
Stephen Sunderland, a partner focused on medical technology at Shanghai-based LEK Consulting, estimated that if the US and European Union were to follow the same level of testing penetration as South Korea, where the testing effort has been heralded, there would be a need for 4 million tests.
With this in mind, it is unlikely that all the manufacturing capacity in the world could meet demand, at least in the near term.
Testing equipment is “not like making masks,” said the source at BGI, who warned that it would be impossible for non-specialist firms like Ford, Xiaomi or Tesla to make test kits, given the complexity and barriers to entry.
From the company’s current capacity of 600,000 a day, “it is impossible to expand the factory” due to the procedural wrangling involved, said the BGI source.
The space in which diagnostic equipment is produced in China must meet tight clinical standards, and so it is understood that the approval process for a new facility takes between six and 12 months.
The outbreak has also tightened the availability of the raw materials used in the equipment, leading to shortages the world over.
For instance, a product made by Zymo Research to transport and store biological samples is available in ample supply. But the firm is seeing a shortage of the simple swabs needed to gather the samples.
China has never been a world leader in diagnostic equipment, with European and American firms generally dominating the market, but the trajectory of the virus means China has become a vital hub for supplies.
At a time of such shortages, the cases in Spain and the Philippines confirm that, amid the urgent scramble for medical commodities, the buyer should always beware.
This story originally appeared on Inkstone , a daily multimedia digest of China-focused news and features.
Copyright (c) 2020. South China Morning Post Publishers Ltd. All rights reserved.

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