Germany’s health policy has set the goal of reaching an endemic state. Its advent marks the long-awaited end of the pandemic. Covid would then be similar to the common cold. Since everyone has basic immunity from vaccinations or infections, any subsequent outbreaks would then hopefully differ little from the flu season.
For China, too, the transition to endemicity would bring an end to lockdowns, curfews, and mass testing. But immunity is still lacking. China’s vaccines do work against Omicron – but its effectiveness is limited. A booster by Biontech would provide a solution. But despite existing contracts with the Fosun Group, the German vaccine has not yet been approved. Our analysis tracks down the reasons.
Another once highly praised German-Chinese partnership is also currently dead in the water. As a result, Daimler is largely withdrawing from the unsuccessful Denza joint venture with BYD. Yet there is an uneven balance of power, analyzes Frank Sieren. In China, Daimler is desperately dependent on a technologically strong partner like BYD, while the latter is also one of the most successful players on its own.
The Omicron variant is putting China’s health policy under considerable pressure (China.Table reported). Although the numbers in Xi’an are currently declining again, new foci of infection are flaring up in other places. The fact the virus is becoming more contiguous poses problems for the zero-covid strategy. One possible way out would be to vaccinate the population with mRNA vaccines and then lift all quarantine measures. The population could then build up immunity to Omicron.
But China has blocked the path to endemicity in several places. This is what scientists call an occasional and rather harmless flare-up of infections. This requires widespread baseline immunity among the population. One roadblock to this is the fact that China has made freedom from the virus a high political goal. It has long become a measure of the party’s success. The other blockade is the preference for its own vaccine.
The preference for their own products is understandable, but also problematic in the current situation. “The inactivated vaccines that were administered in China, i.e. a dead virus, unfortunately, have a very poor efficacy against Omicron.,” said German virologist Christian Drosten of Charité on Deutschlandfunk radio. He believes a booster vaccination with Biontech or Moderna would be sensible. “If you add an mRNA vaccine to it now, then you will once again gain a sufficient effect.”
In principle, China would have every opportunity to launch an mRNA vaccination campaign. A supply agreement with Biontech has been in place since the very beginning. The Mainz-based company signed a contract with the privately held Shanghai company Fosun Pharma in March 2020. Behind this is the Fosun Group of billionaire Guo Guangchang, who in turn is a member of the CP and the People’s Congress. This makes Biontech’s contract with Fosun significantly older than the one with its US partner Pfizer. This is according to the book “The Vaccine: Inside the Race to Conquer the COVID-19 Pandemic” by Uğur Şahin and Özlem Türeci.
The vaccine was introduced in Europe and the USA in December 2020. The assumption at the time was that China would also soon include it in its vaccine mix. Şahin made a trip to Shanghai in April 2021 specifically to work out the details. He sat across from his interlocutors behind a plexiglass screen or conferred from his hotel room via video feed. Despite his presence, quarantine regulations made an actual meeting impossible. He spoke with Fosun representatives and the government.
But in the nine months since, the Biontech drug has not received approval in China. Instead, state media spread false reports about the product (China.Table reported). The government probably feared that its own vaccines would be given an image as B products. This also happened in Germany and elsewhere, where AstraZeneca was quickly seen as the second choice over Biontech. Yet AstraZeneca is also considered highly effective and safe. In fact, mRNA products are even more effective.
Against Omicron, the Biontech agent is already about as effective as the Chinese vaccines against the original variant after only two doses, namely about 55 percent. After the booster, Biontech immunity against Omicron increases significantly. At least in petri dish experiments, it reaches the range provided by two mRNA doses against the original variant. All this considered, this information could quickly make the domestic Chinese products look like B-stock.
German products also continue to have a positive image in China. If the Biontech vaccine, with its efficacy of over 90 percent, were to compete with the domestic product with efficacy X, the latter could quickly be left behind. If China had doubts, however, its vaccine diplomacy would also be jeopardized.
Yet China’s vaccine is a boon for many countries in the Global South. A reasonably effective vaccine is still much better than no vaccine at all. The country announced that, by the end of 2021, it will have exported two billion doses. And even inactivated vaccines can prevent severe illness.
Domestically, China’s vaccines definitely provide baseline immunity for the 1.2 billion double-vaccinated population. However, it seemingly shares one particular characteristic with its Western counterparts. The effect wears off within a few months. So a booster with Biontech would make sense right now. But approval is still pending.
Perhaps China will rely on its own mRNA vaccines. That would be a huge PR success for the high-tech location in the Far East. A home-grown booster would also fit in with the leadership’s strive for independence. Behind the scenes, two companies are already working on their own agents. This makes talk of Biontech pushing for joint production with Fosun rather fitting. In other sectors, joint ventures have already proven to be fast-track venues for industrial skills.
Because without technology transfer, progress would be reached quickly enough. The building of the fatty molecular envelopes in which the mRNA migrates safely into the right cells is very demanding. And even Curevac, which has been researching mRNA drugs for two decades, has not succeeded in developing a suitable vaccine so far.
However, aiding and abetting on the way to Chinese mRNA technology was by no means Şahin’s intention. “There were no concerns about intellectual property or technology transfer,” Şahin and Türeci describe the negotiations with Fosun in their book. Biontech was to supply the vaccine directly from Germany. It could then have been marketed in China as the Fosun vaccine. So Fosun is now just sitting on procurement rights for hundreds of millions of doses without using them.
Looking at the economic landscape as 2021 draws to a close, one cannot help but notice the emergence of new obstacles to a robust recovery. The United States, Europe, China, and others face a growing list of remarkably similar short- and longer-term challenges.
The pandemic remains the most immediate concern. Without full global vaccination, new COVID-19 variants will continue to emerge, potentially forcing governments to renew partial or full lockdowns. The coronavirus thus represents a permanent drag on the recovery.
A second challenge is the blockage of global supply chains, which, together with supply-side shifts in labor markets, has created persistent inflationary pressures unlike anything seen in over a decade. Without cross-border efforts to resolve supply bottlenecks and shortages, central banks may be forced to curtail today’s surging demand by tightening monetary policy.
Another common issue is the complex task of properly regulating the digital technologies and sectors that now account for an increasingly large share of most economies. Regulators in Europe, the US, China, and India have been intensifying their efforts on this front, writing new rules for data security, access, and usage, and launching investigations into potential abuses of market power, especially by the mega-platforms. As the financial sector shifts to digital payments and currencies, and as new entrants emerge in credit, insurance, and asset-management markets, there is an urgent need to adapt regulations to ensure fair competition, access to valuable data, and financial stability.
It is no secret that a substantial share of incremental wealth creation in recent decades has occurred in technology sectors such as e-commerce, payments, fintech, and social media. The result has been high concentrations of new wealth, which in turn raises concerns about undue influence over policy. Such worries are particularly evident in the US and China, even though the two countries have very different systems of governance, and thus different channels through which influence is exercised.
Similarly, although the terminology differs in the US and China, both countries are struggling to reverse rising income and wealth inequality and declining social mobility. In the US, many politicians speak of delivering more inclusive growth. In China, the government has launched a new campaign to achieve “common prosperity.” Heated debates in both countries about how best to pursue these goals reflect concerns that an excessive or overly narrow approach to redistribution could adversely affect economic efficiency and dynamism.
The similarity between these national policymaking efforts suggests that the US and China have a common interest in establishing new rules of engagement in the global economy and the financial sector. Both must adapt to the new realities implied by the digital revolution and shifting global power balances. There is also a clear need for new agreements to limit the offensive use of digital and cyber technologies, and to free up benign cross-border flows of technology (in health, education, and other sectors) that are at risk of being blocked by national-security considerations.
Finally, there is the global challenge of climate change. Without the free and frictionless movement of the necessary technologies and financing, the world will have no chance of limiting global warming to 1.5° Celsius above pre-industrial levels. Here, too, success will depend on whether the US and China can work together.
With so many common challenges, one might have expected the world’s leading powers to pursue a difficult but reasonable balance between strategic competition and strategic cooperation. After all, both China and the US would benefit from acknowledging that they have compelling common interests, not just unavoidable disagreements.
But, for the most part, this has not happened. Although US President Joe Biden and Chinese President Xi Jinping recently agreed to carve out space for cooperation on climate change and the energy transition, the US nonetheless has doubled down on strategic competition, citing national-security concerns. We are still a long way from enjoying the free flow of technology needed to reduce global emissions to net-zero by mid-century.
Worse, attitudes on both sides are hardening, with each government settling into a comfortable but unproductive certitude that it occupies the moral high ground. In the US, it is no longer assumed that China’s system of governance will either fail or morph into some version of democratic capitalism. Policymakers in both major parties now believe that China owes its rise to its persistent refusal to play by the rules.
On the Chinese side, US strategy is seen as an effort to impede or even reverse China’s economic and technological progress. America’s partisan polarization and social divisions are presented as evidence of a failing political and economic system.
Meanwhile, the global economy continues to experience at least four major structural transformations: the multi-dimensional digital revolution; the push for clean energy and environmental sustainability; major breakthroughs in biomedical science and biology; and the rise of Asia. All four developments bring major opportunities for improving global welfare across many different dimensions; but each also will involve disruptive transitions that require major adaptations to existing global institutions and frameworks.
Under these circumstances, we don’t really have the luxury of focusing exclusively on competition or picking fights for domestic political gain. The risks to global health and prosperity are too high. Escaping the dangerous path of competition without cooperation will require sustained leadership on both sides and from all sectors of society. There is no guarantee of success, but there is no alternative to trying.
Michael Spence, a Nobel laureate in economics, is Professor of Economics Emeritus and a former dean of the Graduate School of Business at Stanford University. He is Senior Fellow at the Hoover Institution, serves on the Academic Committee at Luohan Academy, and co-chairs the Advisory Board of the Asia Global Institute.
Copyright: Project Syndicate, 2021.
www.project-syndicate.org
Beijing’s canals are a major source of recreational opportunities. People swim in the murky water year-round, joggers and dog owners jog along its banks. And in winter, ice hockey is also possible. This group is already trying to warm up for the highlight of winter sports fans: the Winter Olympics next month. At the moment, however, they are still resting a little.
Germany’s health policy has set the goal of reaching an endemic state. Its advent marks the long-awaited end of the pandemic. Covid would then be similar to the common cold. Since everyone has basic immunity from vaccinations or infections, any subsequent outbreaks would then hopefully differ little from the flu season.
For China, too, the transition to endemicity would bring an end to lockdowns, curfews, and mass testing. But immunity is still lacking. China’s vaccines do work against Omicron – but its effectiveness is limited. A booster by Biontech would provide a solution. But despite existing contracts with the Fosun Group, the German vaccine has not yet been approved. Our analysis tracks down the reasons.
Another once highly praised German-Chinese partnership is also currently dead in the water. As a result, Daimler is largely withdrawing from the unsuccessful Denza joint venture with BYD. Yet there is an uneven balance of power, analyzes Frank Sieren. In China, Daimler is desperately dependent on a technologically strong partner like BYD, while the latter is also one of the most successful players on its own.
The Omicron variant is putting China’s health policy under considerable pressure (China.Table reported). Although the numbers in Xi’an are currently declining again, new foci of infection are flaring up in other places. The fact the virus is becoming more contiguous poses problems for the zero-covid strategy. One possible way out would be to vaccinate the population with mRNA vaccines and then lift all quarantine measures. The population could then build up immunity to Omicron.
But China has blocked the path to endemicity in several places. This is what scientists call an occasional and rather harmless flare-up of infections. This requires widespread baseline immunity among the population. One roadblock to this is the fact that China has made freedom from the virus a high political goal. It has long become a measure of the party’s success. The other blockade is the preference for its own vaccine.
The preference for their own products is understandable, but also problematic in the current situation. “The inactivated vaccines that were administered in China, i.e. a dead virus, unfortunately, have a very poor efficacy against Omicron.,” said German virologist Christian Drosten of Charité on Deutschlandfunk radio. He believes a booster vaccination with Biontech or Moderna would be sensible. “If you add an mRNA vaccine to it now, then you will once again gain a sufficient effect.”
In principle, China would have every opportunity to launch an mRNA vaccination campaign. A supply agreement with Biontech has been in place since the very beginning. The Mainz-based company signed a contract with the privately held Shanghai company Fosun Pharma in March 2020. Behind this is the Fosun Group of billionaire Guo Guangchang, who in turn is a member of the CP and the People’s Congress. This makes Biontech’s contract with Fosun significantly older than the one with its US partner Pfizer. This is according to the book “The Vaccine: Inside the Race to Conquer the COVID-19 Pandemic” by Uğur Şahin and Özlem Türeci.
The vaccine was introduced in Europe and the USA in December 2020. The assumption at the time was that China would also soon include it in its vaccine mix. Şahin made a trip to Shanghai in April 2021 specifically to work out the details. He sat across from his interlocutors behind a plexiglass screen or conferred from his hotel room via video feed. Despite his presence, quarantine regulations made an actual meeting impossible. He spoke with Fosun representatives and the government.
But in the nine months since, the Biontech drug has not received approval in China. Instead, state media spread false reports about the product (China.Table reported). The government probably feared that its own vaccines would be given an image as B products. This also happened in Germany and elsewhere, where AstraZeneca was quickly seen as the second choice over Biontech. Yet AstraZeneca is also considered highly effective and safe. In fact, mRNA products are even more effective.
Against Omicron, the Biontech agent is already about as effective as the Chinese vaccines against the original variant after only two doses, namely about 55 percent. After the booster, Biontech immunity against Omicron increases significantly. At least in petri dish experiments, it reaches the range provided by two mRNA doses against the original variant. All this considered, this information could quickly make the domestic Chinese products look like B-stock.
German products also continue to have a positive image in China. If the Biontech vaccine, with its efficacy of over 90 percent, were to compete with the domestic product with efficacy X, the latter could quickly be left behind. If China had doubts, however, its vaccine diplomacy would also be jeopardized.
Yet China’s vaccine is a boon for many countries in the Global South. A reasonably effective vaccine is still much better than no vaccine at all. The country announced that, by the end of 2021, it will have exported two billion doses. And even inactivated vaccines can prevent severe illness.
Domestically, China’s vaccines definitely provide baseline immunity for the 1.2 billion double-vaccinated population. However, it seemingly shares one particular characteristic with its Western counterparts. The effect wears off within a few months. So a booster with Biontech would make sense right now. But approval is still pending.
Perhaps China will rely on its own mRNA vaccines. That would be a huge PR success for the high-tech location in the Far East. A home-grown booster would also fit in with the leadership’s strive for independence. Behind the scenes, two companies are already working on their own agents. This makes talk of Biontech pushing for joint production with Fosun rather fitting. In other sectors, joint ventures have already proven to be fast-track venues for industrial skills.
Because without technology transfer, progress would be reached quickly enough. The building of the fatty molecular envelopes in which the mRNA migrates safely into the right cells is very demanding. And even Curevac, which has been researching mRNA drugs for two decades, has not succeeded in developing a suitable vaccine so far.
However, aiding and abetting on the way to Chinese mRNA technology was by no means Şahin’s intention. “There were no concerns about intellectual property or technology transfer,” Şahin and Türeci describe the negotiations with Fosun in their book. Biontech was to supply the vaccine directly from Germany. It could then have been marketed in China as the Fosun vaccine. So Fosun is now just sitting on procurement rights for hundreds of millions of doses without using them.
Looking at the economic landscape as 2021 draws to a close, one cannot help but notice the emergence of new obstacles to a robust recovery. The United States, Europe, China, and others face a growing list of remarkably similar short- and longer-term challenges.
The pandemic remains the most immediate concern. Without full global vaccination, new COVID-19 variants will continue to emerge, potentially forcing governments to renew partial or full lockdowns. The coronavirus thus represents a permanent drag on the recovery.
A second challenge is the blockage of global supply chains, which, together with supply-side shifts in labor markets, has created persistent inflationary pressures unlike anything seen in over a decade. Without cross-border efforts to resolve supply bottlenecks and shortages, central banks may be forced to curtail today’s surging demand by tightening monetary policy.
Another common issue is the complex task of properly regulating the digital technologies and sectors that now account for an increasingly large share of most economies. Regulators in Europe, the US, China, and India have been intensifying their efforts on this front, writing new rules for data security, access, and usage, and launching investigations into potential abuses of market power, especially by the mega-platforms. As the financial sector shifts to digital payments and currencies, and as new entrants emerge in credit, insurance, and asset-management markets, there is an urgent need to adapt regulations to ensure fair competition, access to valuable data, and financial stability.
It is no secret that a substantial share of incremental wealth creation in recent decades has occurred in technology sectors such as e-commerce, payments, fintech, and social media. The result has been high concentrations of new wealth, which in turn raises concerns about undue influence over policy. Such worries are particularly evident in the US and China, even though the two countries have very different systems of governance, and thus different channels through which influence is exercised.
Similarly, although the terminology differs in the US and China, both countries are struggling to reverse rising income and wealth inequality and declining social mobility. In the US, many politicians speak of delivering more inclusive growth. In China, the government has launched a new campaign to achieve “common prosperity.” Heated debates in both countries about how best to pursue these goals reflect concerns that an excessive or overly narrow approach to redistribution could adversely affect economic efficiency and dynamism.
The similarity between these national policymaking efforts suggests that the US and China have a common interest in establishing new rules of engagement in the global economy and the financial sector. Both must adapt to the new realities implied by the digital revolution and shifting global power balances. There is also a clear need for new agreements to limit the offensive use of digital and cyber technologies, and to free up benign cross-border flows of technology (in health, education, and other sectors) that are at risk of being blocked by national-security considerations.
Finally, there is the global challenge of climate change. Without the free and frictionless movement of the necessary technologies and financing, the world will have no chance of limiting global warming to 1.5° Celsius above pre-industrial levels. Here, too, success will depend on whether the US and China can work together.
With so many common challenges, one might have expected the world’s leading powers to pursue a difficult but reasonable balance between strategic competition and strategic cooperation. After all, both China and the US would benefit from acknowledging that they have compelling common interests, not just unavoidable disagreements.
But, for the most part, this has not happened. Although US President Joe Biden and Chinese President Xi Jinping recently agreed to carve out space for cooperation on climate change and the energy transition, the US nonetheless has doubled down on strategic competition, citing national-security concerns. We are still a long way from enjoying the free flow of technology needed to reduce global emissions to net-zero by mid-century.
Worse, attitudes on both sides are hardening, with each government settling into a comfortable but unproductive certitude that it occupies the moral high ground. In the US, it is no longer assumed that China’s system of governance will either fail or morph into some version of democratic capitalism. Policymakers in both major parties now believe that China owes its rise to its persistent refusal to play by the rules.
On the Chinese side, US strategy is seen as an effort to impede or even reverse China’s economic and technological progress. America’s partisan polarization and social divisions are presented as evidence of a failing political and economic system.
Meanwhile, the global economy continues to experience at least four major structural transformations: the multi-dimensional digital revolution; the push for clean energy and environmental sustainability; major breakthroughs in biomedical science and biology; and the rise of Asia. All four developments bring major opportunities for improving global welfare across many different dimensions; but each also will involve disruptive transitions that require major adaptations to existing global institutions and frameworks.
Under these circumstances, we don’t really have the luxury of focusing exclusively on competition or picking fights for domestic political gain. The risks to global health and prosperity are too high. Escaping the dangerous path of competition without cooperation will require sustained leadership on both sides and from all sectors of society. There is no guarantee of success, but there is no alternative to trying.
Michael Spence, a Nobel laureate in economics, is Professor of Economics Emeritus and a former dean of the Graduate School of Business at Stanford University. He is Senior Fellow at the Hoover Institution, serves on the Academic Committee at Luohan Academy, and co-chairs the Advisory Board of the Asia Global Institute.
Copyright: Project Syndicate, 2021.
www.project-syndicate.org
Beijing’s canals are a major source of recreational opportunities. People swim in the murky water year-round, joggers and dog owners jog along its banks. And in winter, ice hockey is also possible. This group is already trying to warm up for the highlight of winter sports fans: the Winter Olympics next month. At the moment, however, they are still resting a little.
