Local governments are increasingly feeling the pain from implementing Beijing’s pandemic policies.

According to the Financial Times, some have stopped paying PCR test providers as they could no longer afford the mass-testing regime. The testing blitz is an integral part of China’s zero-COVID policy. 

A health official told the Times, “Local governments are already stretched to the limit when it comes to Covid prevention and control and they have to move money around when they need it [for zero-Covid purposes].”

The official is from the health commission of Guangdong, one of China’s richest cities. 

Local governments are already on a tight belt as their main source of financing, real estate, has been in a crisis. And as zero-COVID lingers alongside new outbreaks, bills for PCR testing are piling up.

Public data reveal that in September, accounts receivable at the 11 major PCR testing companies in the nation increased by about 90% year over year to reach 38 billion yuan ($5.4 billion). Bloomberg reported that month that the largest increase was 189%, which belonged to Shanghai Labway Clinical Laboratory.

One laboratory in Xuchang city, central Henan province, has announced this week that it will no longer process testing samples, citing overdue payments that date back to January.

One Henan official said other laboratories would follow soon, adding that the funding gap has been too large to cover. Cities have also been silent on when they would resolve the bills.

An executive at Shenzhen-based Centre Testing International Group, a testing provider, says, “We are not sure when or whether they will pay us.” According to the person, cities in northern China have been the ones with significant public debts.

The healthcare system is also under stress due to zero-COVID since resources are being increasingly shifted to finance the policy. One doctor from Wuhan city said some departments’ funding and staffing have been decreasing. Many of them are unable to make equipment purchases.

In Shaanxi’s Baoji city, those returning from high-risk regions are cautioned to pay for their stays in centralized isolation. The Times suggests that this could be a sign some governments are struggling to handle quarantine costs. 

One local official from Baoji says, “If you have a problem paying, we advise you to borrow from your relatives and friends.”

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