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An opinion piece in the New York Post by social scientist and activist Steve W. Mosher claims:

Some Chinese researchers are in the habit of selling their laboratory animals to street vendors after they have finished experimenting on them.

You heard me right.

Instead of properly disposing of infected animals by cremation, as the law requires, they sell them on the side to make a little extra cash. Or, in some cases, a lot of extra cash. One Beijing researcher, now in jail, made a million dollars selling his monkeys and rats on the live animal market, where they eventually wound up in someone’s stomach.

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    That wouldn't be overly surprising. I personally know scientisis (not Chinese) who ate their lab animals (rabbits). If anything, this shows that this isn't necessarily dangerous. – Zeus May 4 at 5:52
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Well. Yes. But perhaps not 'to street vendors' for 'live animals'. And it was pigs, cattle and milk, not monkeys and rats.

The claim in the current climate further implies that 'lab animals' are those that were experimented on – with viruses and other pathogens.

However, the corresponding court verdict does not ascertain what experiments, if indeed any, where carried out on these animals. The available text does not in any way focus on any possible danger emanating from these animals. It just highlights that the financial procedures for buying selling and 'eliminating' these animals were used improperly and fraudulently to enrich private individuals at the expense of public/state property.

From that 'legal ruling' perspective it seems equally possible that

  1. potentially dangerous experimental tissue was ultimately eaten by unsuspecting consumers, or that
  2. 'harmless' experiments carried out – like new feeding patterns – and the products consumed, or that
  3. animals were just showing up as experimental in cooked books, never really subject to any experimentation, and an otherwise generally entirely safe product sold by means of criminal fraud with the state-owned institute just used for bypassing oversight and deprived of their share of the profit.

Since the primary concern of the court ruling is focussed on the financial side, and not on any safety issues, a conclusion from that alone towards favouring the aspect of 'potentially endangering the public' is neither eliminated but also not impossible. That seems to just not have been an issue dealt with in court.

The Global Times is a daily tabloid newspaper under the auspices of the Chinese Communist Party's People's Daily newspaper, commenting on international issues from a nationalistic perspective.
Wikipedia

And this source reports that:

Medical staff and experts have long been asking for better regulation and supervision of biological research institutes in China, but with mixed results.

A top academician at the Chinese Academy of Engineering earned 10.17 million yuan ($1.46 million) by illegally selling off lab animals and experimental milk, according to a report in the Shanghai-based The Paper.

Li Ning, a leading expert at transgenic technologies at China Agricultural University, was sentenced to 12 years in prison on January 2 for grafting 37.56 million yuan.

Management on biology labs is an issue not just for China. The US Centers for Disease Control and Prevention also launched actions in August 2014 to improve its laboratory safety following incidents where research fellows failed to process virus samples properbly.

— Liu Caiyu and Leng Shumei: "Biosafety guideline issued to fix chronic management loopholes at virus labs", Global Times Published: 2020/2/16 20:13:40.

Interestingly, this person did make the headlines as

— Hepeng Jia: "Prominent animal-cloning researcher sentenced to 12 years in prison. Li Ning was arrested in 2014 for allegedly stealing millions in research funding", nature, 13 JANUARY 2020 CORRECTION 14 JANUARY 2020

That is of course another angle, that perhaps just omits the profit from selling 'used' lab animals, and just focusses on the big money involved there.

But international Chinese news sites seem to be quite concerned about the 'selling lab animals' when re-running that story:

— Li Yan (Global TimesEditor): "Biosafety guideline issued to fix chronic management loopholes at virus labs", 2020-02-17 08:52:08 ECNS Special: Battle Against Novel Coronavirus. Rules address chronic virus lab loopholes: experts

An official Chinese court documents server has this to say

Li Ning and Zhang Lei first-instance criminal verdict Release Date: 2020-01-03 Views: 24283 times      Intermediate People's Court of Songyuan City, Jilin Province Penalty verdict (2015) Songpuchuzi No. 15 Public Prosecution Authority Songyuan City People's Procuratorate of Jilin Province.:

  1. The fact that the defendants Li Ning and Zhang Lei used their positions to facilitate the retention of the sales of pigs, cattle and milk produced after the scientific research project experiment From July 2008 to February 2012, related subjects used research funds to purchase pigs and cows needed for the experiment during the research process. When the person Zhang Lei asked the defendant Li Ning how to deal with it, Li Ning instructed Zhang Lei to hand over the money to the accountants Ou Moujia and Xie Moujia for separate custody and not to turn it in. Ou Moujia and Xie Moujia then deposited the money in their personal bank cards. After judicial appraisal, the accumulative amount of intercepted sales of pigs, cattle and milk was RMB 10179201.86. The above-mentioned facts have been proved and cross-examined in court, and the following evidence confirmed by this court is confirmed: (1) Appraisal opinions Proof of judicial accounting appraisal: From July 2008 to February 2012, the income from the sale of pigs is 5643343.36 yuan, the income from the sale of cattle is 1555210.00 yuan, the income from the sale of milk is 2980648.50 yuan, the total of the three items is 10179201.86 yuan; the price of the sale of the above experimental materials should be listed It is the income of China Agricultural University. The original evidence proves that the collected money is deposited in a personal bank card or off-book account. (2) Witness testimony
  2. Witness Ou Moujia's testimony proves that he has been a cashier and accountant at Beijing Jipulin Company from 2005 to present, and he has been the accountant at the College of Biology of China Agricultural University from August 2008 to the beginning of 2012. There are 4 bank cards in his hand, which Li Ning and Zhang Lei can control. From July 2008 to the beginning of 2012, Li Ning and Zhang Lei deposited the proceeds from the sale of pigs, cows, and milk used in the Sujiatuo cattle farm, Zhuozhou pig farm, and Zhuozhou Kangning small pig farm for experimentation and elimination after the experiment into their Agricultural Bank cards. , Agricultural Bank of China Gold Card, Rural Commercial Bank Card, Xie Moujia Agricultural Bank Card and Wang Mouding Agricultural Bank Card. These experimental materials were purchased with project funds. According to the fund management regulations, the cash should be handed over to China Agricultural University after the sale. According to statistics, from the beginning of July 2008 to the beginning of 2012, a total of 8488700.36 yuan was deposited in the Agricultural Bank Card, Agricultural Bank Gold Card, and Beijing Rural Commercial Bank Card, Wang Mouding's Agricultural Bank Card totaled 805200.00 yuan, Xie Moujia's Agricultural Bank Card The CCP deposited 885301.50 yuan. A total of 10,179,201.86 yuan was deposited in the bank cards of the three people, none of which was turned over to China Agricultural University. The source and amount of all the money in the card has been reported to Li Ning, and it also reports the monthly income and expenditure to Li Ning in the form of a report. Li Ning also reads the report every time. Li Ning decides how to use it. Before the capital injection, Ji Fulin Company also reported the source of the money to Li Ning. In March and April of 2012, before investing RMB 27 million in Wuxi Kejienuo Biological Technology Co., Ltd. (hereinafter referred to as Kejienuo), Li Ning asked him to make a simple source of funds table. The money and sources on the bank card kept by Ji Fulin Company and its individuals made a table and handed it to Li Ning. Li Ning said that Dongfang Taihe Company and Guo Moujia thought that the two audit committees thought there was a problem. The rest is used to invest in Koteno. At the end of 2009, Li Ning and Zhang Lei needed money to register Ji Fulin Company, which transferred a total of 2 million yuan in the card to Li Ning 1 million yuan, Zhang Lei 500,000 yuan, and Dai Moujia 500,000 yuan. In 2010, Chen Moujia issued a total of about 7 million yuan invoices throughout the year, and paid a total of about 2.1 million yuan to his company and his personal agricultural bank card. This more than 2.1 million yuan, together with the total amount of more than 3.3 million yuan sold in 2010 to eliminate cows, pigs and milk, was used to invest in Ji Fulin Company. Before investing, he reported the source of the money to Li Ning.
    In April 2012, the company invested 27 million yuan in the second phase of Kejienuo Company, including the repayment of Chen Moujia Company and Guo Moujia Company, and the sale of eliminated pigs, cattle and milk sales.

This is machine translated legalese, so proceed carefully to interpret the quote. (And please feel more than invited to offer translation improvements.

How, where and to what end those 'to be eliminated animals' were sold and moved around seems unclear to me. The 'to street vendors' part of the claim is therefore not conclusively proven.

For what it's worth, animals infected on purpose to get a vaccine and selling the remains off for food and fodder was standard practice in the West until the 1960s at least. In the case of fodder often even without thermal treatment to inactivate any viruses and bacteria.

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Note that Li was mostly doing (and was famous for) genetic engineering rather than anything infectious. More from the Nature piece that LangLangC alas quoted only a little bit:

A Chinese court has sentenced leading animal-cloning researcher Li Ning to 12 years in prison. The ruling comes more than 5 years after he was arrested for allegedly embezzling millions in research funding. Li’s former assistant, Zhang Lei, also received a sentence, of more than 5 years in prison. [...]

Li was one of the nation’s most famous scientists, thanks to his work on animal cloning and genetically modified animals. His team engineered goats to express an enzyme from earthworms, and cows to express a human milk protein, in their milk. Before being arrested, he was a chief scientist for China’s mega research project on cloning and genetic modification in animals.

And the quotes from lawsuit don't seem to say the sales were illegal in another way than Li and Zhang having deposited the funds in their personal accounts.

Note that selling genetically modified animals in China is not illegal, and can be quite lucrative, for both research and petting purposes. (Although Chinese labs have stepped back from the latter more recently.)

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