Global Corporations and Economy
Vaccine Race: The Implications for the World Economy

Countries around the world are placing high hopes on the new COVID-19 vaccines in their joint efforts to fight the COVID-19 epidemic, while continuing to face “deficits” in vaccine production capacity and global distribution issues. As a developing country, China has offered to provide its vaccines as public goods to the rest of the world, particularly to people from less developed countries, emphasising the concept of building a global health community for mankind, write Wang YiweiChen Chao.

More than production capacity, it is about industrial system

There are several urgent issues that need to be addressed, the first of which is the deficit in production capacity. At present, four vaccines have been approved for marketing, with conditions, in China. China has the world’s second-largest economy, with a complete industrial system and a large domestic market. With the support of an orderly and sufficient production chain and supply chain, China could meet the needs of large-scale vaccine production at present and in the future; more than 60 million Chinese have been vaccinated.

China is building a modern industrial system during its 14th five-year plan period, and has entered a new era of industrial civilisation. Vaccine production chains and supply chains benefit from China’s strong industrial system. Its production involves multiple procedures, including the supply of equipment for the production line, raw materials, packaging materials, cold chain equipment for vaccine circulation and transportation, and equipment needed for vaccination. Thus, taking full advantage of its national industrial system, China has established the upstream and downstream in the industrial supply chain. The value of the whole industry chain model of China’s manufacturing industry has once again been verified. Improving fundamental industrial capabilities and removing technological bottlenecks are crucial to achieve high-quality growth under the dual circulation development strategy.

More than fair distribution, it is about technology R&D

The second issue highlighted is the distribution deficit. Although vaccines are independently selected and decided upon by each country, the problem of vaccine distribution persists, especially in low-income countries: even one dose is difficult to obtain.

The vaccine gap between rich and poor, besides being problematic in and of itself, is also expected to widen the development gap.

A study by the RAND Corporation estimated that the unequal distribution of vaccines could cost the global economy as much as $1.2 trillion per year. WHO Director-General Tedros Adhanom Ghebreyesus said that if vaccines are not distributed equitably, “the world faces a moral and economic disaster”. 

Vaccine research and development is a symbol of a country’s scientific and technological potential and progress. In other words, the vaccine race might be regarded as a competition among different R&D methods. Some conservative voices support “vaccine nationalism”, which insists on the localisation of vaccine R&D. Others argue that there is a race between China, the US and Russia over the technology routes and that only one winner will emerge. Others argue that any vaccine that has been shown to be effective and safe should be accepted without discrimination. In other words, the vaccine race itself is a major achievement of human technological progress. 

The COVID-19 Vaccine: The Public Domain or Is Everyone for Himself?

More than vaccine cooperation, it is about public goods for all 

The pandemic continues to spread globally, and the fight with the virus is far from over. So far, the protection rate of Chinese vaccines is over 79.34%; these offer a combination of safety, effectiveness, accessibility and affordability, meeting the standards of the World Health Organisation and the State Food and Drug Administration of China. At the first session of the 15th G20 Leaders’ Summit, Chinese President Xi Jinping stressed that “China actively supports and participates in international cooperation on the COVID-19 vaccine... and is ready to strengthen cooperation with other countries in vaccine research, development, production and distribution. We will honour our commitment to provide assistance and support to other developing countries in an effort to make vaccines a useful and affordable public good for all people.” It shows that China has adhered to the vision of building a community with a shared future for mankind. By doing so, China is not only responsible for the lives and health of its own people; it is also undertaking a responsibility for global public health, to pursue international cooperation. 

First, China provides vaccine aid to developing countries that are less developed. China has provided vaccine aid to 69 developing countries that are in urgent need. At the same time, the country is donating vaccines to United Nations peacekeepers and has already committed to providing 10 million doses for COVAX, make them a global public good as it promised. Given that the developing countries, particularly African countries, have weaker public health systems. China has taken efforts to improve their accessibility and affordability in developing countries. 

Second, China encourages and supports enterprises to export vaccines to countries that are willing to buy vaccines from China. The Sinopharm and Sinovac vaccines have been exported to 43 countries, including the United Arab Emirates, Morocco, Indonesia, Turkey, Brazil and Chile. China supports relevant enterprises in exporting vaccines to countries which are either in urgent need or have authorised the use of Chinese vaccines. Many countries have already approved Chinese vaccines for local use.

Third, China could support domestic vaccine manufacturers in carrying out joint research and development, as well as the commissioned and joint production of vaccines with overseas partners. In order to further promote China’s vaccine becoming a global public good, the medium-term consideration is to establish an overseas production centre, increase the supply by boosting domestic production, and strengthen production chains to help other countries manufacture vaccines. China could provide raw materials, technology and other assistance to boost local production capacity, making the Chinese vaccine a fully public good. 

Fourth, China could cooperate with developed Western countries. On one hand, it might be possible to promote Chinese vaccines into the US market. China and the United States are highly complementary in this regard. The accessibility and affordability of Chinese vaccines makes them suitable for poor people in the US who cannot afford expensive vaccines. In addition, the Biden administration has put a strong emphasis on vaccine equity and improving vulnerable groups’ access to the vaccine. He may be able to cooperate in this area. On the other hand, China and the West could strengthen cooperation in vaccine research and development, vaccine testing and treatment through third-party cooperation, especially in Africa. In the context of regular epidemic prevention and control, most of the developing countries are dualistic, with relatively weak economic growth but Western medical and legal systems. If Chinese vaccines are to enter developing countries, their producers can and must cooperate with developed Western countries. 

Fifth, China could enhance regional and international cooperation to meet transnational challenges facing COVID-19 vaccines. BRICS (Brazil, Russia, India, China and South Africa) is a cooperation mechanism for emerging markets and developing countries with global influence in the fight against the pandemic. This has largely shattered the myth of a stable Western hegemony. Its member countries are truly equal. Cooperation in fighting the COVID-19 epidemic is a reflection of the spirit of BRICS cooperation. The BRICS New Development Bank has shown the way forward in allocating financial resources to combat the epidemic. Among them, China and Russia are helping each other, which reflects the special nature of their relations in the new era. 

Fu Ying, a former Vice Minister of Foreign Affairs of China, made her speech at the Valdai International Discussion Club in 2016, “In the history of international relations, trust has been a rare commodity. Although mankind has progressed a lot, lack of trust remains an impediment to genuine partnership in today’s world.” All in all, it is a race to immunise people and save lives. If vaccines are not used as public goods, the epidemic will remain uncontrolled, globalisation will not be able to return to normal, and the global supply chain will be in chaos. Whether a vaccine is Chinese or not, it is good as long as it is safe and effective. Chinese vaccines or “people’s vaccines”, like the Chinese Belt and Road Initiative, are non-competitive and non-exclusive, contributing to the building of a community with a shared future for all.

Vaccine as a Global Public Good. An Expert Discussion (In Spanish)
Views expressed are of individual Members and Contributors, rather than the Club's, unless explicitly stated otherwise.