Connect with us

Emerging Markets

Chinese purchases of US exports fall far behind trade deal pledge

Published

on


China has purchased less than three-fifths of the US goods projected under the “phase one” trade deal that paused a tariff dispute between the two countries a year ago, posing another challenge for the administration of Joe Biden in its relations with Beijing.

Under the terms of the deal, China agreed to buy $200bn of US goods and services more than it did in 2017, before the start of the trade dispute, over a two-year period to the end of 2021.

Trade analysts have been measuring Beijing’s progress towards that goal, and the latest Chinese import data suggest they are falling far behind.

According to analysis from the Peterson Institute for International Economics, based on data to the end of last month, Beijing had purchased just 58 per cent of the US exports expected under its projections.

China’s imports of US products covered by the trade deal’s purchase commitments amounted to $100bn by the end of December, compared with a prorated target of $173.1bn, the institute said.

Trade Secrets

Trade Secrets is the FT’s must-read daily briefing on the changing face of international trade and globalisation.

Sign up here to understand which countries, companies and technologies are shaping the new global economy.

The shortfall presents a challenge to the Biden administration as it decides how much of the Trump administration’s policy on China to keep in place, including whether to preserve US tariffs on billions of dollars of Chinese imports.

Chad Bown, a fellow at the Peterson Institute, said the deal was “always a political agreement”, and that the Biden team should “de-emphasise the purchase commitments”.

“You want to reward behaviour, and not necessarily encourage the Chinese state to make all of these purchases at the same time as you’re trying to say — ‘no, become more market-oriented’,” Mr Bown said.

Speaking to the Financial Times last week, Robert Lighthizer, outgoing US trade representative, said that with respect to analysing China’s fulfilment of its purchasing commitments, it was “quite unfair of people to act like Covid didn’t happen”.

Mr Lighthizer, who as Donald Trump’s top trade official oversaw US trade negotiations with Chinese officials, said the phase one deal was comprised of more than purchasing commitments. He argued that there were “an awful lot of changes” that China had made to intellectual property protections; new and clear rules that Beijing cannot force the transfer of technology from US companies to Chinese companies; and some opening up of the country’s financial services.

Bar chart of $bn showing China's purchases of US goods fall short of 'phase one' deal targets

The agreement set out targets for broad sectors, which could be satisfied with purchases of products from aircraft to medical equipment and soyabeans to seafood and services such as tourism or cloud computing.

On purchasing commitments during 2020, some sectoral exports fared better than others. China come closest to fulfilling its agricultural purchases, and did most poorly on energy purchasing commitments. 

China has bought $23.5bn of the agricultural products covered by the deal, compared to an expected first-year figure of $36.6bn.

Chinese imports of US energy products covered by the deal were just $9.8bn, however, against an implied target of $25.3bn for the year. The collapse in oil and other energy prices during the pandemic made the deal’s dollar target all but impossible to hit.

The low oil price has, however, led to a surge in crude import volumes in recent months as China stockpiled supply while prices were depressed.

Its crude imports from the US averaged about 1m barrels a day from May to September, around three times the same period last year, according to US government data — but analysts question whether China will keep up this pace of buying as prices recover.

The first phase of the trade deal did not address some of the biggest sources of tension between the two countries, including commercial cybertheft in China and Beijing’s use of industrial subsidies.

Phase two talks never occurred under the Trump administration, however, as the US-China relationship soured further.

Mr Biden has said he would aim to work with Europe to further pressure Beijing on trade issues, ending the Trump administration’s strategy of negotiating alone, and his incoming officials have so far indicated that they consider it a key priority.

In her maiden speech earlier this month, Katherine Tai, incoming United States Trade Representative, said that “stiffening competition from a growing and ambitious China” would be one of the top issues in her trade brief. Janet Yellen, incoming Treasury secretary, also told Congress this week that the administration would look to swiftly deal with any economic misbehaviour from China.

 



Source link

Continue Reading
Click to comment

Leave a Reply

Your email address will not be published. Required fields are marked *

Emerging Markets

Narendra Modi’s popularity slips as Covid crisis hammers India

Published

on

By


Narendra Modi’s popularity has fallen during India’s deepening Covid crisis, according to an opinion poll, as the country reports more than 400,000 daily infections in a brutal second wave.

The prime minister’s approval rating fell to 65 per cent on May 4, down from 74 per cent at the end of March, according to Morning Consult, the US data company — the lowest level since the agency began tracking Modi’s rating in August 2019.

The Indian leader’s disapproval rating also rose to its highest level since the tracker was launched, climbing to 29 per cent from 20 per cent.

Modi’s approval rating remained high compared with other global leaders, but the country’s health and humanitarian crisis has taken a toll.

The prime minister has a strongman reputation but has been accused of indifference in the face of the Covid-19 disaster as he campaigned in state elections even as the outbreak worsened.

“One of the things that Modi has really been good at is perception management. He’s always been very good at messaging,” said Ronojoy Sen, senior research fellow at the Institute of South Asian Studies in Singapore. “This is the first time I would say that his messaging has been awry.”

India’s death toll from the second wave has reached about 4,000 people per day © AP

Modi’s government has sought to deflect blame for the calamity on to state governments and the public for failing to follow pandemic protocols.

As deaths have risen, Harsh Vardhan, the health minister, has also cited official data to boast that India’s fatality ratio was lower than those of richer countries.

However, in a stinging letter to Modi on Friday, Rahul Gandhi, leader of the opposition Congress party, sharply criticised the government for a “lack of a clear and coherent Covid and vaccination strategy as well as hubris in declaring premature victory”.

The letter called for more decisive action to control the spread of the virus, as well as greater scientific tracking of the virus and its mutations.

“Allowing the uncontrollable spread of this virus in our country will be devastating not only for our people but also for the rest of the world,” Gandhi wrote, adding that India was a fertile ground for the virus to mutate into “a more contagious and a more dangerous form”.

India reported a record 414,188 infections and 3,915 deaths on Thursday. There have been more than 234,083 confirmed deaths from the disease in the country.

However, most experts believed the figures severely undercounted the magnitude of the crisis because of a lack of testing, especially in small towns and rural areas.

“Right now, data is very corrupted,” Gautam Menon, a professor of biology at Ashoka University, told a recent seminar. “It’s good in some states and it’s very bad in other states.”

Many epidemiologists believe India’s latest outbreak is set to peak in the coming weeks and caseloads will gradually fall, partly helped by lockdowns implemented by some state governments.

The country’s vaccination campaign is losing momentum, however, because of an acute shortage of jabs. The Modi government has been accused of failing to adequately plan its inoculation campaign.

India administered 1.6m vaccines on Thursday and the seven-day moving average of daily vaccinations has fallen to 1.4m, down from a peak of 3.6m in mid-April.

Many Indians were incensed to see Modi boasting of the huge sizes of crowds gathered for his recent election rallies in West Bengal state as the country struggled to access life-saving drugs, hospital beds, oxygen and vaccines.

The prime minister’s Bharatiya Janata party lost its bid to seize power from the Trinamool Congress party in Sunday’s election despite Modi’s efforts.



Source link

Continue Reading

Emerging Markets

Africa celebrates suspension of Covid vaccine patents

Published

on

By


African health officials were on Thursday celebrating what one called a “bold and wonderful” breakthrough after the Biden administration threw its weight behind a temporary suspension of intellectual property rights on Covid-19 vaccines.

African Union officials hope that at least three countries — South Africa, Senegal and Rwanda — will develop the capacity to produce vaccines for the continent, including the mRNA-type vaccines that emerged as an innovative technology against Covid-19.

John Nkengasong, director of the Africa Centres for Disease Control and Prevention, welcomed the US administration’s backing of an IP waiver, a position that is supported by dozens of developing countries led by South Africa and India.

It would, he said, “definitely be a great influence to facilitate the mRNA manufacturing agenda”, adding that there are “very focused discussions” about producing vaccines on the continent.

South Africa has some of the continent’s most advanced vaccine knowhow, including Aspen, a Durban-based company that plans to “finish and fill” — though not make from scratch — 300m doses of Johnson & Johnson’s vaccine this year. The Pasteur Institute in Dakar, Senegal, also has vaccine-producing experience, making small quantities of yellow fever jabs each year.

John Nkengasong, director of the Africa Centres for Disease Control and Prevention, welcomed the Biden administration’s backing of an IP waiver © Zacharias Abubeker/FT

In addition, Paul Kagame, president of Rwanda, suggested Kigali could become a vaccine hub. “It is important for Africa to forge public-private partnerships for vaccine manufacturing on our continent,” he said last month, adding that Africa needed to accelerate a continental approach to medicines regulation. “Vaccine equity cannot be guaranteed by goodwill alone,” he said, adding that it was time for African countries to stop “being sorry for ourselves” and act.

Africa is extremely dependent on India for its vaccine production, a weakness that has been exposed by a temporary Indian government ban on the export of Covid-19 jabs. Less than 1 per cent of Africans have received a single dose of Covid-19 vaccine and new supplies have all but dried up.

Officials warned there was still a long way to go before African manufacturers could start production. “The fact that the US has indicated it is willing to waive IP rights does not mean that it is actually going to happen,” said Ayoade Alakija, co-chair of the Africa Vaccine Delivery Alliance, who anticipated pushback from pharmaceutical companies and perhaps other countries in the EU and elsewhere.

The first step, said Rebecca Enonchong, a Cameroonian technology entrepreneur and board member of the World Health Organisation Foundation, was to “ensure the patent issue was not an issue”. But even then, she said, it would take time to build up the physical and skills capacity necessary to make mRNA vaccines. There is also a global shortage of vaccine inputs, including nucleotides, enzymes and lipids as well as of vials, caps and syringes. “I think it is unlikely that we will be able to ramp up for this pandemic,” Enonchong said.

Kiran Mazumdar-Shaw, chair of Biocon, a Bangalore-based biotech company, said she did not see IP as the biggest obstacle. “Today, everybody is talking about patents, patents and patents. Even if they don’t enforce patents, how many people can produce Moderna vaccines at scale?” she said, referring to one of the mRNA vaccines.

Building manufacturing capacity in the developing world was “the next big issue”, said Fatima Hassan, founder of the Health Justice Initiative, a South African campaigner for access to vaccines. There had been at least 50 applications already to a WHO hub for transferring mRNA technology, she said, which “indicates that there is definitely interest around the world”.

Two decades ago, South Africa led the battle, along with Brazil, against pharmaceutical companies’ defence of patents on HIV medicines. Legal victories finally forced companies to slash prices of antiretroviral drugs for developing countries, but not before millions of people had died of the disease. South African diplomats pressing for the temporary suspension of patents on Covid-19 vaccines said that “passing this waiver makes ethical, epidemiological, and economic sense”.

Additional reporting by Amy Kazmin in New Delhi



Source link

Continue Reading

Emerging Markets

A harrowing brush with Covid as India is ravaged

Published

on

By


As a foreign correspondent, my job is to tell India’s stories, not be part of them. But when I started feeling feverish while writing an article about Covid-19 vaccine policy last month, I had a gut feeling that the Sars-Cov-2 virus had found me.

I hoped it was exhaustion that I’d sleep off but the next day, still feverish, I was urged to take a Covid test. A leading diagnostic lab chain, which earlier had run an efficient home-testing service, had stopped answering its phones and responding to online requests. But a doctor friend persuaded one of the lab’s phlebotomists to collect my sample. Two days later, the results confirmed I was part of the ferocious coronavirus wave battering India and pushing its healthcare system to breaking point.

Over the following days, my physical symptoms remained mild. But it was still harrowing to be sick from a notoriously unpredictable virus knowing that drugs, hospital beds and oxygen were scarce. I suffered constant anxiety knowing I’d struggle to get medical help if I took a turn for the worse.

I quickly discovered that I’d been so focused on avoiding infection that I had no clue what to do once sick. A friend connected me to a Kolkata-based infectious disease specialist, who felt I was at low risk for severe illness. I’d had the first dose of a Covid vaccine 10 days before my fever started. But the doctor urged me to treat the illness aggressively from the start, given the chaos at hospitals.

He prescribed the antiviral drug, favipiravir, now undergoing clinical trials in the UK as a potential Covid-19 therapy but already approved in India for emergency use. Many of his patients had taken it, he said, and none suffered severely, including people in their 90s.

Normally, I’m reluctant to medicate. I knew favipiravir’s effectiveness as a coronavirus treatment wasn’t yet scientifically validated. But with hospitals turning away ailing patients, the logic of taking an experimental drug made sense. The challenge, I discovered, was to get hold of it.

I called five pharmacies, but all had run out of stock. A friend called six more to no avail. I panicked — the doctor wanted me to start the drug fast and Delhi was hours from the start of a weekend curfew. Then a friend, who’d heard I was Covid-19 positive, called.

“I’m looking for this drug,” I told her. “Any idea where I can get it?” She said she’d check. It turned out that people with foresight had prepared small emergency drug stashes. Her friend had such a stash and was willing to share it.

I was elated to get the pills to start treatment that night. But it wasn’t enough for the prescribed course. Days later I spent hours calling pharmacies in an unsuccessful hunt for more, before finally begging an industry friend to help.

My difficulties pale in comparison with the desperation, anger and grief beyond my sickroom. My Twitter feed was filled with pleas for hospital beds, oxygen cylinders, the antiviral remdesivir, plasma or a place in an intensive care unit. Top hospitals begged on Twitter for refills of dwindling oxygen supplies. Friends and many professional contacts were fighting for their lives. Doctor friends were weeping with impotent rage.

There was much grim news of death. A former Indian ambassador died after hours waiting in a hospital parking lot for admission; inpatients whose oxygen ran out; a top politician’s 34-year-old son, young journalists. Crematoriums struggled with an unprecedented flow of bodies.

I decided I had to tune out of the unfolding crisis, to ensure my physical recovery and to protect my mental health. I stopped checking Twitter. Newspapers piled up, unread.

Once I felt better and tuned back, I saw Narendra Modi’s government had cynically expanded eligibility for vaccination to all over the age of 18, despite an acute shortage of jabs.

And with thousands dying daily, often for want of medical help, the health minister was callously citing dubious official data to claim India’s Covid fatality rate was lower than richer countries — hardly consolation to grief-stricken families.

Today, I’ve recovered from my encounter with the virus. It will take far longer to get over the trauma of watching this calamity engulf the place I call home.

amy.kazmin@ft.com



Source link

Continue Reading

Trending