The COVID Testing Industrial Complex has forged China’s richest man

And the FDA rolled out the red carpet for his Beijing-based pharma giant.

The COVID Testing Industrial Complex is raking in hundreds of billions of dollars in global revenue, and it has helped a Chinese businessman exponentially increase his wealth over the course of the past year, to the point where he has become the richest person in all of Asia.

Step aside, Jack Ma. There’s a new man in China topping the rich list.

With an estimated net worth currently sitting at around $85 billion, Zhong Shanshan has become the 6th richest person in the world, and the richest person in Asia. How did this man come to compete with the likes of Mark Zuckerberg, Warren Buffett, Google Founders Sergey Brin and Larry Page, and Oracle’s Larry Ellison?

Zhong’s wealth comes from two places: the COVID-19 testing and vaccine industry, and water bottling.

He owns a 75% equity stake in Beijing Wantai Biological Pharmacy Enterprise (commonly referred to as Wantai), which has a market cap of around $10 billion, along with 84.4% of the water bottling company Nongfu Spring (which sits under the umbrella of a pharmaceutical company owned by Mr. Zhang) has a market cap closing in at $50 billion. Both companies had incredibly successful IPOs this year in Chinese markets, and their valuations have exploded upwards.

Wantai stock has risen almost 2000% on the Shanghai Stock Exchange since entering the market on April 30, 2020.

Wantai, the Chinese pharma giant, has successfully leveraged COVID-19 hysteria, and in doing so, has raked in billions of dollars through the export of its COVID-19 tests and other services.

The pharmaceutical company has had incredible success in pushing its products out to market. Check out this Wantai infographic to get a sense of their distribution network.

The United States is no exception. The FDA has issued emergency use authorization (EUA) for multiple Wantai-created COVID-19 diagnostic tests and antibody tests. Wantai is one of ten Chinese companies that has received an EUA from the FDA for COVID testing in the United States. In November, Wantai boasted that it had analyzed more than 10 million COVID-19 tests. This alone could amount to an estimated $1.29 billion in cost, given that the median COVID-19 test costs about $129.

Over 10 million tests later, you might be wondering if the Wantai product is useful. The data does not look promising, to say the least.

The Wantai PCR COVID test diagnoses someone as COVID-19 positive if the test detects specimens in a threshold of up to 40 cycles, which puts it firmly in the junk test category. There is no benefit to such a test, because the sensitivity rate is so high that the result is useless. A cycle threshold of 40 makes it virtually impossible to determine whether someone actually has COVID-19, and it will only create an epidemic of false positives (we call it a casedemic). Wantai, however, is far from the only testing company that is sending out junk tests. In fact, most COVID-19 PCR tests are junk tests, but Wantai sits on the upper limit of the junk tests, given its incredibly high cycle threshold.

In addition to its global distribution in the COVID-19 testing market, Zhong’s Wantai is competing in the COVID-19 vaccine space.  Wantai’s COVID-19 vaccine is currently undergoing phase 2 trials.

For reasons unknown, Zhong resigned from Wantai this past week. The Chinese government has launched a continuous crackdown and shakedown on business leaders who are perceived as becoming a threat to the central authority of the Communist Party. Several Chinese billionaires, including Alibaba founder Jack Ma, have not been seen in public for months.

Zhong’s story is not exclusive to China. The chaos and disastrous policymaking surrounding COVID-19 has not impacted U.S. billionaires like Jeff Bezos, Mark Zuckerberg, and Bill Gates. Virtually every U.S. billionaire has seen an increase in their financial portfolio over the course of 2020. But while the world’s richest men become even more wealthy, hundreds of millions of small and medium sized businesses around the world are collapsing under the weight of failed, continuing draconian policy measures.