COVID-19 originated in China; so did the diagnostic tests that saved lives

It wasn’t so long ago that the US-China trading relationship was not only a huge benefit to the United States, it also saved American lives. That would be in 2020, as the COVID-19 epidemic reached American shores. Because China was the first country affected, in 2019, it was unsurprisingly the first to isolate and genetically sequence the novel SARS-CoV-2 virus, an achievement that is poorly recognized and overlooked by China bashers.

With the genetic sequence at hand, China developed diagnostic tests for COVID-19, including the more sophisticated polymerase chain reaction test (PCR) and blood tests to detect the presence of antibodies specific to the new virus. From a purely economic perspective, China’s ability to act quickly allowed the deployment of diagnostic tests worldwide, especially to the United States, a beneficial byproduct of globalization.

But that was then. To be sure, starting in 2019, some in the United States had already begun accusing China of “weaponizing” its drug exports. Concerns were directed at growing US imports of medications and active pharmaceutical ingredients (APIs) from China. A similar concern was developing in Europe, also increasingly reliant on China for antibiotics, anti-inflammatories, painkillers, antihistamines, gauze, bandages, and surgical masks, among a host of other medical products.

In March 2020, when the US workplaces, public spaces, and community facilities started shutting down, Americans were desperate for the tests and masks and other protective gear that only China was supplying. But in a world marked by growing protectionism, Chinese dominance of the diagnostic testing market in the early phases of the pandemic was viewed suspiciously. These suspicions were then set aside, replaced by gratitude in some circles for the availability of Chinese materials needed to save US lives and livelihoods. However, once the United States started producing its own tests in 2021, Europe switched from buying them from China to purchasing them from the United States, though the US-made tests were far more expensive than those made in China.

These fluctuating trends reflect the reality of global commerce today. But a cautionary note is in order. Many experts expect that the next respiratory pandemic virus may well be incubated once again in Asia, in which case, the United States and Europe would find themselves once again dependent on China. The anti-China bias uncovered by international trade data shown below is a disservice to fighting future pandemics.

More specific background may be in order. The novel virus first identified in the city of Wuhan quickly spread around China in late 2019 and early 2020. Viral identification and sequencing allowed the rapid development of diagnostic tests, while recognition of the dangers it posed led the Chinese government to adopt strict containment policies, including the complete lockdown of entire cities.

By the second half of 2020, China had contained its first COVID-19 outbreak—only much later would viral mutations lead to more severe outbreaks and the adoption of the zero-COVID policy. Hence, by mid-2020, China had ramped up its capacity to manufacture COVID-19 diagnostic tests to a much greater extent than any other country, but at that point, it had little use for its vast stock of test kits. Naturally, it banked on this first-mover advantage by exporting these kits to the rest of the world. By then it was understood that Chinese diagnostic tests were considered highly reliable.

In late February 2020, several northern Italian cities were hit by a severe outbreak of COVID-19 that claimed thousands of lives and quickly spread around the continent. Since the Europeans had yet to develop their own diagnostic tests, they bought them from China (figure 1a). These test kits included both the more sophisticated PCR reagents, as well as antibodies and immunological products to detect the presence of SARS-CoV-2 in a patient’s blood.

Surprisingly, the United States, even with its sophisticated biotech industry, followed suit (figure 1b).

Once the threat jumped to the United States, the US government prioritized developing vaccines, not tests. Operation Warp Speed became the most successful case of rapid vaccine development and deployment in modern times. The development took months, not years, thanks to an inventive approach of developing several promising candidates, ultimately leading to the now well-known mRNA vaccines produced by Moderna and Pfizer-BioNTech. However, to the chagrin of the scientific community, the United States did not invest much in developing diagnostic and screening tests for SARS-CoV-2. In fact, as figure 2 shows, it was only under the Biden administration that the United States began to produce at-scale much-needed PCR tests. By then it produced enough tests to end its dependence on China and even export them to the rest of the world.

As the United States increased its capacity to manufacture PCR and other COVID-19 diagnostic tests, Europe turned away from China and started importing test kits from the United States (figure 2):

Importing from the United States was hardly cost effective. Because of the abundance of reagents and laboratories in China equipped to run PCR tests, their cost in China was estimated to be $1.5 per person. In the United States, on the other hand, the median cost of a US-produced COVID-19 PCR test was $127, or nearly 100 times more than the Chinese equivalent. That being the case, why did the Europeans switch from China to the United States for their diagnostic tests? While we don’t know for sure, there seems to have been particular discomfort in relying on China to provide such a critical diagnostic procedure. Hence, the switch can partly be interpreted as a manifestation of the anti-China sentiment and fear of relying on a supposedly untrustworthy trading partner.

The story holds alarming implications for international trade and pandemic preparedness. Escalating fear over China not only implies that countries are increasingly prepared to forgo the efficiency gains brought on by trade—buying from countries that produce the same goods at a cheaper cost frees up resources that can be allocated elsewhere—but also that the global effort toward increased pandemic preparedness may be at risk from geopolitical tensions.

China will continue to manufacture critical pharmaceuticals at a cheaper cost. Ignoring that reality may place countries at greater risk as inevitable future pandemics materialize, especially in the United States, where anti-China sentiment is on the rise.