China blamed for Canada’s multimillion-dollar coronavirus vaccine deal collapse

As China races to develop a COVID-19 vaccine, a multimillion-dollar collaboration between Canada and China has failed, likely because of Beijing’s geopolitical concerns, say scientists with direct knowledge of the project.

This week Canada’s National Research Council (NRC) announced it has abandoned its partnership with Chinese company CanSino Biologics, because China’s government continues to block shipments of vaccine materials to Canada.

The NRC — which is part of the Minister of Innovation, Science and Industry — has received about $44-million since late March to upgrade its production capacity in Montreal in preparation for materials expected from CanSino.

Now the NRC says it is working with two other COVID-19 vaccine collaborators including the United States company VBI Vaccines.

“With the funding received from the Government of Canada on March 23 and April 23, much work is underway at NRC … to certify our facility … and expand production,” NRC stated. “These enhancements to the facility will support a broad range of partners and clients with research, scale-up support, and the manufacturing of vaccines and therapeutics.”

In May, Prime Minister Justin Trudeau endorsed the deal with CanSino —  a company funded by Beijing and producing its vaccine with the People’s Liberation Army.

CanSino’s COVID-19 vaccine is being tested on Chinese soldiers and has been approved for testing at the Canadian Center for Vaccinology (CCfV) at Dalhousie University in Halifax. CanSino’s vaccine was supposed to arrive at the CCfV in June.

But after Canada signed the CanSino deal “the Government of China changed rules on shipping vaccines,” the NRC said this week in a statement.

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CanSino was founded in 2009 by Chinese scientist Dr. Xuefeng Yu, who was educated at McGill University in Quebec and worked for Sanofi Pasteur, before returning to China.

Yu did not respond to interview requests from Global News, but this week reportedly told the Globe and Mail that “bureaucratic indecision” from Chinese officials has delayed shipments of CanSino’s vaccine to Canada.

The failed collaboration was based upon the NRC providing CanSino a license to use Canada’s proprietary biological product HEK293, a line of cells that CanSino has previously used with the Chinese military to develop a vaccine for the Ebola virus.

In an interview CCfV director Scott Halperin said “the collaboration between CanSino and (CCfV) and NRC was excellent.”

“The vaccine was caught up in Chinese customs, and CanSino did everything they were asked to, but the approvals never came through.”

Halperin said the key benefit to Canadians — if the CanSino vaccine had passed testing at Dalhousie — was Canadians would have been front of the line with a guaranteed supply of the CanSino vaccine, produced in Canada by the NRC.

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Halperin and another leading Canadian vaccine researcher, Gary Kobinger, said geopolitical competition appears to have destroyed the Canada-China vaccine partnership.

“We can’t think of any other reason the vaccine was not shipped,” Halperin said.

“Getting politics involved into a vaccine is never good,” Kobinger said. “Whether it’s the Chinese government or the Chinese army or the Canadian government (responsible for the CanSino deal failure) I think it’s unfortunate that politicians are building walls.”

Margaret McCuaig-Johnston — a former Canadian assistant-deputy minister responsible for vaccine collaborations with China — said she believes senior Chinese officials have blocked the CanSino shipments in order to retaliate against Canada for the Meng Wanzhou extradition case, or simply to pursue their geopolitical objectives of becoming a world-leading vaccine provider.

McCuaig-Johnston said in her experience China has previously used customs blockages as a tool in trade disputes, but only top Chinese officials have the authority to take such actions.

McCuaig-Johnston said she was one of the Canadian officials that signed onto an agreement with China in 2007, to share vaccine and technology research. And the partnership was once promising, she said.

“This was a surprise to see our commitment to China, in sharing very significant proprietary intellectual property, run into this major blockage,” McCuaig-Johnston said. “China’s success in vaccines is standing on the back of Canadian researchers and scientists. Over the years we helped China develop its capacity. But China is no longer a reliable partner.”

McCuaig-Johnston says that Canada should broadly reassess any significant research partnerships with China, as evidence mounts that President Xi Jinping’s regime uses international collaboration in order to modernize the People’s Liberation Army and protect the Chinese Communist Party’s interests. And Canadian researchers need to be educated about Xi’s goals.

McCuaig-Johnston says she briefs Canadian scientists working on artificial intelligence (AI)  — a field where Beijing plans to dominate by 2025 — on the risks of collaboration.

“When I talk to Canadian AI scientists, they often say ‘I have partnered with my Chinese friends, they would never steal from us,’” McCuaig-Johnston said. “I say ‘yes they would. Unfortunately, that is how China’s system works.’”

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Public Safety Canada has not answered a question from Global News on whether Canadian intelligence agencies provided any warnings about risks related to the CanSino vaccine partnership.

But even in March — before Canada committed to a vaccine partnership — there was ample public reporting indicating that China was racing for the vaccine finish line, alone.

CanSino’s military partner, Major General Chen Wei, was portrayed in Chinese-state media as a so-called “wolf warrior” that could bring glory to Beijing.

“A vaccine is the most powerful weapon to end the novel coronavirus,” Chen was quoted on Chinese state TV in March, the Los Angeles Times reported. “If China is the first to develop this weapon with its own intellectual property rights, it will demonstrate not only the progress of Chinese science and technology, but also our image as a major power.”

Chen and CanSino had already leveraged Canadian research to develop an Ebola vaccine based on the HEK293 cell-line first licensed by the NRC to CanSino, in 2014.

Meanwhile, Halperin says he still hopes to work with CanSino on their vaccine test results from a distance, although Canada’s chance to secure CanSino vaccine supply has been lost.