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A World Health Organization team investigating the origins of the coronavirus pandemic arrived in Wuhan on Thursday, more than six months after the probe was launched.

The team of virologists landed a week later than intended after China delayed granting visas, earning a rare rebuke from Tedros Adhanom Ghebreyesus, WHO director-general, who said he was “very disappointed”. Two scientists were reportedly prohibited from entering China at the last minute because they tested positive for coronavirus antibodies, the WHO said.

The experts are expected to be in Wuhan for about a month, two weeks of which will be spent in quarantine when the team members will work with Chinese scientists via video conference.

The visit comes as China is facing an outbreak of cases, with 138 new infections and the first confirmed death from coronavirus in months reported on Thursday. Authorities have imposed the most widespread restrictions since last year, placing curbs on about 23m people ahead of the lunar new year holiday next month.

The probe into Sars-Cov-2 has become a focal point for critics of the Chinese government’s handling of the pandemic who argue Beijing has not been transparent about its origins. (FT, NYT)

Coronavirus digest

  • China’s trade surplus hit its highest ever monthly level in December, as the country’s exports continued to boom during the coronavirus pandemic.

  • Russia says 1.5m vaccines have been distributed and hundreds of thousands of doses are ready, but doctors and officials describe a bleaker reality.

  • New Zealand wants access to vaccines as soon as possible, but has accepted that nations with rising death tolls have a higher priority.

  • US jobless claims accelerated last week to the highest level since August, as the labour market struggles amid a surge in coronavirus cases and deaths.

  • Latin America is the world’s worst-hit region by the pandemic and its economy faces a slow and painful recovery, economists have warned. (FT)

Bar chart of General government gross debt as % of GDP (forecast for 2021) showing Latin America has developing world’s highest debt levels

In the news

US clampdown on China continues The US commerce department finalised rules to make it easier to block Americans from importing technology from China over national security concerns. It also added China National Offshore Oil Corporation and phone manufacturer Xiaomi to government blacklists in a flurry of activity targeting the Asian country during US president Donald Trump’s final days in office. (FT)

Hong Kong internet provider blocks pro-democracy site Hong Kong Broadband Network, one of the city’s main internet providers, has for the first time blocked a pro-democracy website under a new security law, raising concerns the financial hub is implementing mainland China-style limits on internet freedom. (FT)

Trump impeachment fallout Joe Biden has called on congressional leaders to focus on tackling the Covid-19 pandemic and confirming his cabinet nominees even as the US Senate prepares for the trial of Donald Trump. Mr Biden will ask Congress to spend $1.9tn on an economic rescue plan, including new direct payments to Americans. Meanwhile, the far-right has turned to alternative platforms to stoke further unrest after Facebook’s and Twitter’s crackdown. (FT)

US House votes to impeach Donald Trump for a second time

Ghosn feared Renault dismissal over scale of Nissan salary Carlos Ghosn worried the French carmaker would sack him if the true scale of his Nissan salary were disclosed, according to court testimony by the whistleblower who triggered the downfall of the former automotive supremo. (FT)

Barnier warns post-Brexit border friction ‘the new normal’ The EU’s Brexit negotiator has warned that many of the frictions hampering cross-Channel trade will be impossible to smooth over as part of the inevitable consequences of Brexit. Boris Johnson, UK prime minister, experienced that friction on Thursday when he was accused of “betraying” the UK fishing industry. (FT)

Cambodia begins ‘show trial’ of opposition The country has begun a mass trial of politicians and activists, in what human rights groups described as an attempt by the country’s leader to wipe out his remaining opposition while the world is focused on fighting Covid-19. (FT)

Murdoch’s India drive James Murdoch is embarking on a new media venture in India after reuniting with Uday Shankar, the executive who helped build his family’s Star television empire. The project aims to build a “large-scale” business spanning digital media, education and healthcare delivery, developed in part through acquisitions. (FT)

Uday Shankar and James Murdoch formed one of India’s most successful media partnerships in building the Murdoch family’s Star television empire 
Uday Shankar, left and James Murdoch, right, formed one of India’s most successful media partnerships in building the Murdoch family’s Star television empire  © FT Montage; Getty

The days ahead

India’s government meets with farmers Protesting farmers will attend the ninth round of discussions with officials on Friday in hopes of securing the repeal of the contentious farm laws. (Times of India)

US bank earnings JPMorgan, Wells Fargo and Citigroup report US fourth-quarter earnings on Friday. A strong end to 2020 has allowed America’s top lenders to buy back more than $10bn of their shares in the first quarter, but the top Wall Street banks are expected to post fourth-quarter net income about 10 per cent below 2019’s level.

Bar chart of Expected attributable net income at big US banks, in $bn showing Most big US banks are set to post lower profits in the fourth quarter

What else we’re reading

The China challenge The biggest question in geoeconomics this year will be how the US and the EU develop their stances towards Beijing, writes Martin Sandbu in our Free Lunch newsletter. How they do so will do much to determine the global economy’s shape in the years to come. (FT)

Certainty is over-rated and over-rewarded We live in a world that rewards those who speak with conviction — even when that is misplaced — and gives very little airtime to those who acknowledge doubt, Jemima Kelly writes. It’s time to question our approach. John Thornhill articulates a strategy to resist conspiracy theorists. (FT)

Pro-Trump supporters in Los Angeles hold Stop the Steal placards alluding to the US president’s baseless claim that the 2020 election was stolen from him © Etienne Laurent/EPA/Shutterstock

America after the Trump White House As the Trumps head to Florida, their influence is likely to continue in White House exile, writes Edward Luce. Much of the country will celebrate the end of his presidency, but they should be circumspect. Joe Biden’s administration will include many Obama-era veterans, but he needs a new playbook for a new age, Simon Kuper says. (FT)

The Arab uprising: what happened next When Egyptian president Hosni Mubarak’s 30-year reign finally ended in 2011, it was easy to believe the Arab world had changed. But a crackdown that first targeted the Islamist movement has evolved into an assault against critical debate. Here are the voices of activists as they reflect on their struggles for reforms. (FT)

Ten years after the Arab spring, Egyptian activist Mona Seif, left, remains focused on the plight of her jailed brother and sister. ‘I don’t operate on hope. I’m mostly motivated by household survival,’ she says
Ten years after the Arab uprising, Egyptian activist Mona Seif, left, remains focused on the plight of her jailed brother and sister. ‘I don’t operate on hope. I’m mostly motivated by household survival,’ she says © AP

Turkish intrigue in the Balkans Extractions of Turkish citizens across the Balkans and other nations beholden to Ankara have raised alarm over President Recep Tayyip Erdogan’s assertive foreign policy. Several officials told the Financial Times that they had faced “constant” pressure to comply with the crackdown on alleged coup plotters or risk consequences. (FT)

This is the third part of a series exploring Turkey’s geopolitical ambitions.

Why Spacs are booming in New York but not in London Regulatory and tax measures are holding Europe back from joining the Spac boom, said Xavier Rolet, the former CEO of London Stock Exchange Group. Mr Rolet has gotten into the Spac game himself — and hopped the pond from London to do so. (Quartz)

The future of business travel The sector directly and indirectly supports one in seven jobs worldwide, according to the Global Business Travel Association. It also subsidises mass tourism and had annual revenues of $1.4tn in 2019. But in the pandemic, it has lost an estimated $710bn of revenue. Will hotels and airlines ever claw that back? (FT)

Line chart showing global bookings for all travel periods as a year-on-year % change, seven-day moving average

Video of the day

Are we in a stock market bubble? FT’s Robert Armstrong looks at the surging stock prices of Tesla, Bitcoin and Nasdaq index stalwarts which the Federal Reserve could view as a tech-led asset bubble.

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Emerging Markets

Australia’s treasurer warns global stimulus threatens financial stability




Australia has warned that unprecedented global stimulus efforts during the coronavirus pandemic are creating financial stability risks that will only intensify when interest rates inevitably rise.

Canberra has also defended tough new foreign investment rules that have led to a collapse in Chinese investment, arguing the number of proposed deals motivated by strategic, rather than purely commercial gain, was increasing.

Josh Frydenberg, Australia’s treasurer, said the Pacific nation was in a strong economic position as its net debt to gross domestic product was about half that of other advanced economies, even as it begins unwinding fiscal stimulus.

“There is no doubt elevated debt levels will create challenges for many countries. While global interest rates are low those debt levels can be serviceable — but there will be a time when the monetary policy settings change,” he told the Financial Times.

Frydenberg’s comments on the risks posed by global stimulus followed a similar warning delivered last week by Peter Costello, a close political ally and former Australia treasurer.

Australia will be among the first advanced economies to taper off Covid-19 fiscal stimulus with the closure of its A$90bn (US$70bn) JobKeeper wage subsidy scheme this month.

Canberra has argued that the recovery is already under way, citing a fall in unemployment to 6.4 per cent in January and a 3.3 per cent economic expansion in the three months to September last year.

Frydenberg, who counts Margaret Thatcher and Ronald Reagan among his role models, said the government’s A$250bn stimulus was required to stabilise the economy during the pandemic. But he said JobKeeper, which supported 3.6m workers at its peak, was no longer needed as the recovery could be supported by tax cuts, which were announced last year.

Asked if he thought the economic policies of Thatcher and Reagan were still relevant, he said: “[Reagan and Thatcher] achieved a lot when they were in office and they were committed to lower taxes. They were committed to cutting regulation and that’s certainly what I’ve been committed to as well.”

But trade unions and businesses that are still suffering as a result of border closures and restrictions, particularly in the tourism and entertainment sectors, have warned that the scheme’s closure will dent the economy.

“JobKeeper should be extended for those businesses that are still affected by coronavirus. [Through] no fault of their own, they are suffering that downturn,” said Sally McManus, secretary of the Australian Council of Trade Unions, last week. “And we say that because that will save jobs.”

Josh Frydenberg, Australia’s treasurer, is a rising star in the country’s conservative government and is tipped as a future prime minister © AP

Frydenberg, who was the architect of foreign investment rules aimed at countering rising Chinese influence, said he made no apologies for putting “national interest” at the heart of Australia’s investment policies.

Chinese investment fell 61 per cent last year to A$1bn, down from A$2.6bn in 2019 and a peak in 2016 of A$16.5bn, data showed. Frydenberg was instrumental in blocking two potential deals: China Mengniu’s A$600m bid for Japan-owned Lion Dairy and China State Construction Engineering Corp’s A$300m bid for Probuild, a South Africa-owned construction company.

“We absolutely reserve the right to make decisions around foreign investment based on national interest and having put in place an explicit national security test allows us to do that,” he said.

“Increasingly we’ve seen foreign investment proposals that have been motivated not by purely commercial gains but more strategic ones. When those foreign investment proposals potentially compromise the national interest, then we reserve the right to say no.”

Frydenberg said Australia was not alone in tightening its rules, noting that other countries shared Canberra’s views on national sovereignty and foreign investment.

“Obviously we have had some challenges with China,” he said when asked about Beijing’s imposition of trade sanctions on a range of Australia’s exports following Canberra’s call last year for an inquiry into the origins of Covid-19 in Wuhan.

Frydenberg insisted that Australian ministers were prepared to sit down with their Chinese counterparts to discuss the bilateral relationship but only on a “no conditions attached” basis.

“It is a mutually beneficial trading relationship — we supply the bulk of their iron ore and that iron ore has helped underpin their economic growth,” he said.

Frydenberg is a rising star in Australia’s conservative government and is tipped as a future prime minister.

Last week, he shot to global attention following several days of negotiation with Facebook’s Mark Zuckerberg over the social media company’s decision to block news on its platforms in Australia in response to a law forcing it to pay news publishers.

On Friday, Facebook “refriended Australia” and returned news to its Australian platform following amendments that may make it easier for the company to avoid the toughest elements of the law.

“Trying to negotiate with these guys is a bit like playing chess against a chess master,” said Frydenberg, who joked that he spoke to Zuckerberg more than his own wife last week.

“The reality is they are massive companies with huge balance sheets and global reach. If this was easy other countries would have done it [made Big Tech pay for news] long ago.” 

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Ecuador’s exporters caught between US and China after debt deal




Exporters in Ecuador are worried that their all-important trade with China will suffer as a result of a controversial agreement the US says is aimed at shutting China out of the South American country’s 5G telecoms network.

The agreement, signed by the US International Development Finance Corporation (DFC) and the Ecuadorean government just days before Donald Trump left office in January, envisages the US buying oil and infrastructure assets in Ecuador on the understanding Quito uses the proceeds to pay off its debt to China.

It also obliges Ecuador to sign up to what the Trump administration called the “Clean Network” — a state department initiative designed to ensure that nations exclude Chinese telecoms services and equipment providers as they build out their high-speed 5G mobile networks.

Adam Boehler, the recently departed chief executive of DFC, has described the deal as a “novel model” to eject China from the Latin American nation.

But it has caused unease in Ecuador, which has become increasingly reliant on exports to China.

“The announcement has generated a lot of inquiries and a lot of doubts,” said Gustavo Cáceres, head of the Ecuadorean-China Chamber of Commerce (CCECH). “We hope our authorities handle this in the best way possible so as not to give the impression that we’re turning our backs on China.”

One of the smallest countries in South America, Ecuador has traditionally exported primarily to the US and Europe, but China is fast catching up. Its share of Ecuador’s exports jumped from 3.9 per cent in 2015 to 15.8 per cent. In the same period, the US’s share fell from 39.4 per cent to 23.7 per cent.

The Chinese buy oil, shrimp, bananas, cut flowers, cacao and timber from Ecuador. Last year, despite the coronavirus pandemic, Ecuador’s exports to China grew more than 10 per cent and, for the first time, the country boasted a trade surplus with Beijing.

The shrimp industry has become particularly important. Since 2016, Ecuador’s shrimp exports worldwide have jumped 86 per cent. The nation of just 17.4m people is now the largest exporter of shrimp in the world, having overtaken India last year, when it exported 676,000 metric tonnes of the crustaceans in trade worth $3.6bn. After oil, shrimp were the country’s most lucrative export commodity.

Over half of that went to China, which, with its expanding middle class, is acquiring a taste for seafood once seen as a luxury.

“China will remain our main market,” forecast José Antonio Camposano, president of Ecuador’s National Chamber of Aquaculture (CNA), which oversees the industry. “We need a smart approach to China. A market of 1.4bn people with the acquisitive power that the Chinese have? I’m a businessman, how can I say no to that?”

The CNA was sufficiently worried by Ecuador’s agreement with the US that it sent a three-page letter to Ecuador’s president Lenin Moreno reminding him of China’s buying power.

While the letter did not mention the DFC deal directly, it urged Moreno — who in his four years in power has shifted Ecuador’s axis away from Beijing and towards Washington, reviving relations with the IMF and renegotiating the country’s debt to bondholders — “to reinforce with senior Chinese leaders the point that the excellent relationship between Ecuador and China remains intact”.

Freshly caught shrimp being packed into containers in Ecuador in 2011
Ecuador’s shrimp industry has fed a growing appetite among China’s expanding middle class © Bloomberg

China’s ambassador to Ecuador, Chen Guoyou, said he was unconcerned by the DFC deal and described media reports that it excluded Chinese companies from Ecuador’s telecoms network as “over-interpretation and gratuitous assumption”.

“China respects the sovereign and independent decision of the Ecuadorean government to develop pragmatic, balanced and diverse partnerships with other countries,” he told the Financial Times in an email.

Responding to his comments, one of the former Trump administration officials who negotiated the deal said it had been made explicitly clear in the text that the agreement was contingent on the country participating in the “Clean Network” — which would prevent it from including Huawei or any other Chinese company in its telecoms network.

The future of the deal, and indeed Ecuador’s future relations with China and the US, will depend in part on the outcome of the country’s presidential election on April 11. It pits leftwing economist Andrés Arauz against Guillermo Lasso, a conservative former banker. 

Arauz has the backing of Rafael Correa who took Ecuador out of the US’s orbit and pushed it towards China while serving as president from 2007 until 2017. He broke off relations with Washington’s financial institutions and signed a series of loans-for-oil deals with the Chinese. If Arauz wins the election he is likely to seek support from Beijing and might rip up the DFC agreement, particularly now Trump is no longer in office.

In contrast, Lasso told the FT previously the deal was “a pleasant surprise” and “good news” for Ecuador.

“It’s clear that the US is our principal ally and in my government I would look for an even closer alliance with the US,” he said.

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Brazil virus variant found to evade natural immunity




The P.1 Covid-19 variant that originated in Brazil and has spread to more than 25 countries is around twice as transmissible as some other strains and is more likely to evade the natural immunity people usually develop from prior infection, according to a new international study.

The research, conducted by a UK-Brazilian team of researchers from institutions including Oxford university, Imperial College London, the University of São Paulo, found that the P.1 variant was between 1.4 and 2.2 times more transmissible than other variants circulating in Brazil. 

It was also “able to evade 25-61 per cent of protective immunity elicited by previous infection” with any earlier variant, the researchers found, in a sign that current vaccines could also be less effective against it.

International concern about the P.1 variant has escalated recently, with more than 25 countries detecting the variant, including Belgium, Sweden and the UK, which has identified six cases.

The scientists are expected to release a paper describing the research on Tuesday. Dr Nuno Faria, the lead author, did not immediately respond to a request for comment. The study has not yet been peer reviewed.

The researchers have dated the emergence of the P.1 variant to November 6, 2020, around one month before cases began to surge for a second time in the Brazilian city of Manaus. They found that the proportion of cases classified as P.1 in Manaus increased from zero to 87 per cent in the space of 7 weeks. 

The paper concluded: “Our results further show that natural immunity waning alone is unlikely to explain the observed dynamics in Manaus, with support for P.1 possessing altered epidemiological characteristics.”

“Studies to evaluate real-world vaccine efficacy in response to P.1 are urgently needed,” it added.

The researchers also found that infections were 10 to 80 per cent more likely to result in death in Manaus after the emergence of P.1. However, the authors cautioned that it was not possible to determine whether this meant the variant was more lethal or whether it was a result of increased strain on the city’s healthcare system, or a combination of both. 

The P.1 variant has over 17 mutations, which alter its genetic sequence from the virus originally identified in Wuhan, including 3 key changes to the spike protein that it uses to enter human cells.

Researchers in Brazil have been using genetic sequencing technology developed by Oxford Nanopore in the UK to identify and track the variant. The technology was first used in Brazil during the Zika outbreak in 2015.

Dr Leila Luheshi, director of applied and clinical markets at Oxford Nanopore, told the Financial Times that while the B.1.1.7 variant in the UK has similar properties of high transmissibility to P.1 — it is thought to be around 1.5 times as transmissible as variants that preceded it — there was no evidence to date that it evaded past natural immunity in the same way. Studies so far have also shown that current vaccines retain their efficacy against B.1.1.7.

Luheshi said that the concern with P.1 is that “because it has these mutations around the spike . . . the hypothesis is that the vaccine will be less effective.” But she added that there is not yet definitive evidence to support this theory. 

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