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US China hawks wage battle over commerce department post

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A once low-profile post in the commerce department has emerged as a key battleground for China hawks in Washington who want to push Joe Biden to take a hard line on technology exports to Beijing.

Biden has yet to name his choice to head the department’s Bureau of Industry and Security but some critics are already targeting Kevin Wolf, an Obama administration export control lawyer now at Akin Gump, a law firm, who is seen as the frontrunner.

“Commerce matters a lot, especially because Treasury is unlikely to take serious anti-China action. That’s why so many China hawks are focused on this,” said Derek Scissors, a China expert at the American Enterprise Institute. “If we want to take serious action against China, BIS is arguably the single most important bureau in government.”

BIS controls the export of dual-use technologies that can be employed for commercial and military purposes. Since the end of the cold war, and as China has emerged as a huge commercial market, companies have increasingly lobbied for the ability to export technology to China.

Hawks, however, worry about China’s “military-civil fusion” programme, which forces Chinese companies to share technology with the People’s Liberation Army. They say the US must be more vigilant about exports because of Chinese threats, and also because of how some technology enables human rights abuses, including the persecution of Muslim Uighurs in the north-west region of Xinjiang and the repression of pro-democracy activists in Hong Kong.

During the Trump administration BIS put dozens of Chinese companies, including Huawei, on the “entity list”, which bars US businesses from exporting to them without a licence. It also placed Semiconductor Manufacturing International Corporation and DJI, the drone maker, on the list.

In a sign of the concerns about the Biden’s administration approach to such issues, Republican senator Ted Cruz this week put a hold on the confirmation of Gina Raimondo for commerce secretary after she initially refused to commit to keeping Huawei on an export blacklist during her confirmation hearing.

Leslie Shedd, spokesperson for the House of Representatives foreign affairs committee Republicans, led by the Texas congressman Michael McCaul, said BIS should be run by someone with national security credentials and a “clear-eyed view” of the China threat. “If a nominee does not possess those . . . the congressman would have serious concerns,” she said.

Some critics also argue the bureau should no longer be run by lawyers who have worked with industry, which can be more focused on capturing market share in China than on US national security.

“The revolving door between BIS and industry must close,” said a former official. “The Biden team must act in the best interests of security, not corporate profits.”

Critics have compiled a dossier on Wolf, part of which was seen by the Financial Times, that raises questions about his work advising companies that are seeking licences to sell to Huawei, as well as his firm’s representation of some Chinese companies, including SMIC, on the entity list.

Wolf told the FT he had simply explained to clients what was permitted under law. He said he had not worked for any Chinese companies and was not responsible for work done by other lawyers at his firm.

Wolf said the China security threat was “significant and had evolved considerably” but that the existing multilateral export control system had not been built to address the current challenge.

“This is why someone who understands the threats, the technologies, the supply chains, the rules and how to create a new approach with a smaller group of close allies is needed,” said Wolf, who added that he did not know who would be nominated for the job.

One former Trump official, who believes Wolf would be a smart choice for the job, said that while the Trump administration had been good at identifying the China threat, it had been bad at addressing the challenge partly because of the chaotic application of export controls.

“We didn’t do a good enough job with the tools in our toolbox,” the former official said. “You need someone at BIS who really understands how the tools work to more effectively tackle Huawei and other Chinese companies.”

Wolf’s supporters contend that the lobbying campaign is a Republican effort to paint Biden as weak on China. Some say Wolf is a technocrat who would not make China policy, but would implement decisions taken by the National Security Council, which lacks his expertise.

But China hawks respond that while top-level decisions on things such as the “entity list” are not driven by BIS, the bureau has leeway in terms of how export control rules are crafted and implemented.

Scissors said BIS had been plagued historically by “industry capture”. Yet he said he would rather see an export-control expert run BIS than a China hawk without that background. He stressed that the Senate should grill any BIS nominee about how they view the threat from Beijing.

Robert Blair, head of policy planning at the commerce department until January, said it was crucial to have the right person in the job to “ensure US policy tools are working to protect our economic and national security, while ensuring our economic prosperity at home remains a priority”.

One executive said BIS had been a “regulatory backwater” that tended to view the balance between promoting US business and protecting American security in a way that accommodated industry, but had to change.

“BIS now finds itself on the front lines of the US-China technology conflict, an arguably even more important role than USTR (US trade representative) or the Treasury,” he said. “The question is, can BIS and its future leadership adapt to this new world?”

Follow Demetri Sevastopulo on Twitter





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Narendra Modi’s popularity slips as Covid crisis hammers India

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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.



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Africa celebrates suspension of Covid vaccine patents

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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



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A harrowing brush with Covid as India is ravaged

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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



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