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Chinese and Russian vaccines in high demand as world scrambles for doses



As the international scramble for Covid-19 vaccines intensifies Chinese and Russian manufacturers have found a growing list of foreign buyers despite lingering concerns over incomplete trial data and the rigour of domestic approval processes.

Russia’s Gamaleya Research Institute of Epidemiology and Microbiology has agreed to sell its Sputnik V vaccine to countries including Algeria, Argentina, Saudi Arabia and Brazil, while the two leading Chinese manufacturers have signed deals with more than a dozen countries including Bahrain, United Arab Emirates, Egypt, Philippines, Indonesia and Hungary.

For Moscow and Beijing, both keen to see their pharmaceutical sectors compete internationally, the sales represent a significant political and commercial coup. China in particular has made bold promises that its vaccines will deliver a diplomatic win by playing a leading role in the global immunisation drive.

“Covid has the potential to significantly change how the world will see China’s vaccines,” said Jennifer Huang Bouey, an expert on China’s health policy at RAND, a California-based think-tank. “We could for the first time see a critical vaccine from China on the global stage.”

Men in Beijing wait to receive a Covid-19 vaccine developed by state-owned Sinopharm, one of several Chinese groups with a coronavirus shot approved or under development © Roman Pilipey/EPA-EFE/Shutterstock

Yet for all the grand ambitions and the queue of willing buyers, neither the Gamaleya Institute nor the leading Chinese manufacturers, Sinopharm and Sinovac Biotech, have published full sets of trial data, leaving most scientists unable to make rigorous comparisons to their western rivals.

“I am very confident with the data we have on the mRNA vaccines,” said Fiona Smaill, a pathologist at McMaster University in Ontario, Canada, referring to the jabs developed by US company Moderna and the German-American partnership of BioNTech and Pfizer. “Because we don’t see that same data for the Chinese vaccines, it is much more challenging for us to have that same confidence.”

The leading Chinese and Russian vaccines all published promising results from early stage clinical trials in peer-reviewed international journals such as The Lancet. In each case, phase 3 safety and efficacy trials were then set up in ways that appeared to meet international standards in terms of scale and process, experts said.

But complete interim results from those trials — the data underpinning conclusions about efficacy — were not released before the vaccines received regulatory approvals either in China or Russia, or in other countries that have registered the vaccines for use.

“Approvals without publishing full phase 3 data is becoming something of a trend,” said Professor Raina MacIntyre, an infectious diseases specialist at the University of New South Wales in Sydney. “Bottom line is, when you are talking about rolling out a vaccine to the public you want to see that data published.”

Russia has supplied doses of Sputnik V to Argentina © Marcos Brindicci/Getty Images

In Russia, President Vladimir Putin made Sputnik V the world’s first registered vaccine in August — its name a nod to the Soviet satellite that launched the space race — when it had only completed phase 2 trials on 76 participants. 

Phase 3 trials of Sputnik V began in September on 30,000 volunteers. Though they will not conclude until later this year, the state-run Gamaleya Institute said in November that interim data from the trials showed the vaccine’s efficacy was 92 per cent — on a par with its western counterparts. The shot uses a harmless adenovirus to deliver the immunising protein into the body, similar to the technology in the Oxford/AstraZeneca jab. The Gamaleya Institute says it has been working on adenoviral vaccines since the 1980s and points to its recent success with an Ebola shot in 2015.

In China, the authorities have allowed the limited use of several vaccines since the summer and gave conditional approval to a vaccine developed by state-owned Sinopharm in December after the company said it was 79 per cent effective in an interim analysis of phase 3 results. Earlier that month, Bahrain and the UAE, which also trialled the vaccine, had said it was 86 per cent effective. None of the announcements included key information normally considered by regulators such as the number of infections among trial participants. Sinopharm did not respond to a request for comment.

Conflicting efficacy data has also been released for the Chinese vaccine developed by Sinovac Biotech. The shot was found to be 91.3 per cent effective in trials in Turkey and 65 per cent effective in trials in Indonesia. In Brazil, trial organisers announced it was 78 per cent effective, then revised that rate to 50.4 per cent when “very mild” cases were included.

Sinovac told the Financial Times the findings were “objective” and a “reasonable” outcome from carrying out independent trials in multiple locations. But the confused releases have raised fears of a knock to public trust in places such as Hong Kong, which is likely to delay its rollout of the jab until seeing more data.

China’s vaccine industry has long been dogged by quality and corruption scandals and none of the companies producing Covid-19 shots have been big exporters in the past.

In 2017, during a public outcry over faulty vaccines, the Wuhan Institute of Biological Products — a branch of the Sinopharm subsidiary developing one of its Covid-19 jabs — was found to have produced 400,520 doses of substandard inoculations against diphtheria, pertussis and tetanus, known as DPT vaccines.

Efforts have since been made to clean up the sector and, domestically, public confidence has improved. One recent study found almost 90 per cent of respondents in China were likely or somewhat likely to take a Covid-19 vaccine, the highest among the 19 countries surveyed.

But China’s vaccine industry is used to supplying government-backed immunisation programmes at home, and has struggled to understand how to develop trust outside China, said Jin Dong-Yan, a virologist at the University of Hong Kong.

“State-owned vaccine makers have basically never needed to work on branding or to describe their review process, because they can rely on the government to gain public trust,” said Mr Jin. “The model of ‘if the nation says it’s OK, then it’s OK’ is clearly insufficient if they want to gain a large share of international markets.”

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Emerging Markets

Petrobras/Bolsonaro: bossa boots | Financial Times




“Brazil is not for beginners.” Composer Tom Jobim’s remark about his homeland stands as a warning to gung-ho foreign investors. Shares in Petrobras have fallen almost a fifth since President Jair Bolsonaro said he would replace the widely respected chief executive of the oil giant.

Firebrand Bolsonaro campaigned on a free-market platform. Now he is reverting to the interventionism of leftist predecessors. It is the latest reminder that a country with huge potential has big political and social problems.

Bolsonaro reacted to fuel protests by pushing for a retired army general to supplant chief executive Roberto Castello Branco, who had refused to lower prices. This is politically advantageous but economically short-sighted.

Fourth-quarter ebitda beat expectations at R$60bn (US$11bn), announced late on Wednesday, a 47 per cent increase on the previous quarter. This partly reflected the reversal of a R$13bn charge for healthcare costs. Investors now have to factor the cost of possible fuel subsidies into forecasts. The last time Petrobras was leaned on, it set the company back about R$60bn (US$24bn at the time). That equates to 40 per cent of forecast ebitda for 2021.

At just over 8 times forward earnings, shares trade at a sharp discount to global peers. Forcing Petrobras to cut fuel prices will make sales of underperforming assets harder to pull off and debt reduction less certain. Bidders may fear the obligation to cap prices will apply to them too.

A booming local stock market, rock bottom interest rates and low levels of foreign debt are giving Bolsonaro scope to spend his way out of the Covid-19 crisis. But the economy remains precarious. Public debt stands at 90 per cent of gross domestic product. The real — at R$5.40 per US dollar — remains near record lows. Brazil’s credit is rated junk by big agencies.

Rising developed market yields will make financings costlier for developing nations such as Brazil. So will high-handed treatment of minority investors. It sends a dire signal when a government with an economic stake of just over a third uses its voting majority to deliver a boardroom coup.

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South Africa’s economy is ‘dangerously overstretched’, officials warn




South Africa is pushing ahead with plans to shore up its precarious public finances as officials warn the economy is “dangerously overstretched” despite the recent boom in commodity prices.

Finance minister Tito Mboweni hailed “significant improvement” as he delivered the annual budget on Wednesday and said that state debts that will hit 80 per cent of GDP this year will peak below 90 per cent by 2025, lower than initially feared.

But Mboweni warned that President Cyril Ramaphosa’s government was not “swimming in cash” despite a major recent tax windfall. The Treasury now expects to collect almost 100bn rand ($6.8bn) more tax than expected this year after a surge in earnings for miners. This compares with a projected overall tax shortfall of more than 200bn rand. Still, the finance minister made clear that spending cutbacks would be necessary.

“Continuing on the path of fiscal consolidation during the economic fallout was a difficult decision. However, on this, we are resolute,” Mboweni said. “We remain adamant that fiscal prudence is the best way forward. We cannot allow our economy to have feet of clay.”

The pandemic has hit South Africa hardest on the continent, with 1.5m cases recorded despite a tough lockdown. An intense second wave is receding and the first vaccinations of health workers started this month. More than 10bn rand will be allocated to vaccines over the next two years, Mboweni said.

‘We remain adamant that fiscal prudence is the best way forward’ – South African finance minister Tito Mboweni © Sumaya Hisham/Reuters

Even before the pandemic’s economic hit, a decade of stagnant growth, corruption and bailouts for indebted state companies such as the Eskom electricity monopoly rotted away what was once a prudent fiscus compared with its emerging market peers. 

Government spending has grown four per cent a year since 2008, versus 1.5 per cent annual growth in real GDP. The country’s credit rating was cut to junk status last year. Despite this year’s cash boost, the state expects to borrow well over 500bn rand per year over the next few years. The cost to service state debts is set to rise from 232bn rand this year to 338bn rand by 2023, or about 20 cents of every rand in tax.

The fiscal belt-tightening will have implications for South Africa’s spending on health and social services. On Wednesday Mboweni announced below-inflation increases in the social grants that form a safety net for millions of South Africans. “We are actually seeing, for the first time that I can recall, cuts in the social welfare budget,” said Geordin Hill-Lewis, Mboweni’s shadow in the opposition Democratic Alliance.

The finance minister is also facing a battle with union allies of the ruling African National Congress over a plan to cap growth in public sector wages. South Africa lost 1.4m jobs over the past year, according to statistics released this week. The jobless rate — including those discouraged from looking for work — was nearly 43 per cent in the closing months of 2020.

The South African treasury expects the economy to rebound 3.3 per cent this year, after a 7.2 per cent drop last year, and to expand 2.2 per cent and 1.6 per cent next year and in 2023 — growth rates that are widely seen as too low in the long run to sustain healthy public finances.

“The key challenges for South Africa do however persist, clever funding decisions aside,” Razia Khan, chief Middle East and Africa economist for Standard Chartered, said. “Weak structural growth and the Eskom debt overhang must still be addressed.” 

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Turkey’s Uighurs fear betrayal over Chinese vaccines and trade




For five days this month, Jevlan Shirmemmet and other Uighur activists protested outside the Chinese embassy in Ankara, where they demanded to know the whereabouts of missing family members in China’s Xinjiang province. But on the sixth day, Turkish police stepped in.

They prevented the activists from gathering outside the diplomatic mission, positioned themselves outside their hotel and accompanied them wherever they went.

The stand-off reflects the difficult balancing act that Turkey, which is home to tens of thousands of exiled Uighurs, must perform with Beijing, not least because it wants closer ties and investment and is reliant on China for supplies of coronavirus vaccines.

President Recep Tayyip Erdogan, who casts himself as a champion of oppressed Muslims around the world, has in the past been a vocal critic of China’s actions in Xinjiang, the north-western region where the Chinese Communist party has interned more than 1m Uighurs, Kazakhs and other Muslims.

“On the one hand, Turkey wants to stand up for us, we know that, we feel it,” said Shirmemmet, 29, whose mother has been detained in Xinjiang since early 2018. “But they aren’t able to. We feel like their hands are tied.”

Jevlan Shirmemmet’s mother has been detained in the Chinese province of Xinjiang since early 2018
Jevlan Shirmemmet protesting in Ankara. His mother has been detained in the Chinese province of Xinjiang since early 2018 © Jevlan Shirmemmet

Analysts say that the plight of China’s Uighurs poses a problem for Erdogan, who is seeking alternative global partners at a time when relations with the west are deeply strained. “They are Muslims, they are Turks, and Turkish voters are sensitive about the issue,” said A Merthan Dundar, director of the Asia-Pacific Research Centre at Ankara University. “The government cannot establish very close relations with China. But it doesn’t want to cut all ties.”

In years past, Erdogan was one of the most outspoken global Muslim leaders concerning the plight of Uighurs, who are seen in Turkey as part of a broader global family of Turkic peoples whose rights Ankara has a responsibility to defend.

But opposition parties have accused Erdogan’s government of toning down its criticism to avoid upsetting Beijing. “Europe and America have spoken out against the oppression of our Uighur brothers in China . . . But there is still not a sound from Ankara,” Meral Aksener, leader of the opposition IYI party, said last month. Turkish officials insist that they continue to raise their concerns with Beijing behind closed doors.

Some figures in Erdogan’s government have advocated for stronger ties with Beijing in order to lure Chinese capital at a time when foreign direct investment from western countries has dwindled.

Investment so far has been limited, with the value of Chinese investment in Turkey standing at $1.2bn in 2019 in terms of equity capital, according to central bank data, compared with more than $100bn from Europe.

A woman in eastern Turkey receives the CoronaVac vaccine. Turkey has ordered 100m doses of the Chinese-made jab
A woman in eastern Turkey receives the CoronaVac vaccine. Turkey has ordered 100m doses of the Chinese-made jab © Chris McGrath/Getty

Ankara is eager for more. The country’s sovereign wealth fund has been courting Chinese investment, and plans to open an office in China in the first half of this year. Ankara also has a swap agreement with China’s central bank that helped to boost the appearance of Turkey’s depleted foreign currency reserves by an estimated $2bn. 

The pandemic has added an extra complexity to the relationship. While Turkey has struggled to procure European-made vaccines, it has a deal in place for 100m doses of the CoronaVac jab made by Chinese drugmaker Sinovac Biotech. Delays to the shipments in December coincided with a decision by China’s parliament to ratify an extradition treaty between the two countries. Turkey has yet to ratify it.

Yildirim Kaya, a member of parliament from the opposition Republican People’s party, said that the ratification of the treaty by Beijing had created “a great deal of panic among Uighur Turks who have escaped from China to Turkey”. In a set of questions posed to the Turkish health minister, he demanded to know if Ankara had faced pressure to ratify the deal to speed up the delivery of the vaccines. Turkish foreign minister Mevlut Cavusoglu reacted angrily to such suggestions. “We don’t use Uighurs for political purposes,” he said. “We defend their human rights.”

Analysts are also sceptical that China would use the vaccine, of which Turkey has already administered 6.2m doses, as such crude leverage. Ceren Ergenc, an associate professor of China studies at Xi’an Jiaotong-Liverpool University in Suzhou, believes it is more likely that Ankara was doing Beijing a favour by signing a deal for a vaccine that had yet to be approved in China — and that still has question marks over its efficacy.

“It happened at a moment when China needed not necessarily the money but the prestige in the international system about the credibility of its vaccines,” she said. “There’s a kind of indebtedness or reciprocity — Turkey still needs financial support from China so it did this act of buying the Chinese vaccine that had at the time not yet undergone all phases of testing.”

In response to questions from the Financial Times, the Chinese embassy in Ankara said the recent protests had sought to “smear” China and that their actions had threatened the safety of the diplomatic mission. It strongly rejected the notion that it had used Turkey’s need for vaccine doses as political leverage as “absolutely unfounded conjecture and malicious misinterpretation”.

Still, the episode has left many members of the Uighur diaspora feeling deeply nervous about their place in Turkey. “China sees us as criminals,” said Mirzehmet Ilyasoglu, who joined this month’s Ankara protests to demand information about his missing brother, brother-in-law and four friends. “We hope that this [extradition] agreement won’t come before parliament, but if it is signed then our concern will grow.”

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