Biden’s China whisperer

The U.S. will soon have its first climate czar, John Kerry, the former senator, secretary of state and almost-president. In explaining the role's placement within the National Security Council, President-elect Joe Biden said he wanted to put "climate change on the agenda in the situation room." Critically, it also signals that the new White House is searching for common ground with China. Kerry is widely credited with putting together a U.S.-China agreement in 2014 to reduce carbon emissions, a breakthrough that paved the way for the Paris Agreement the following year. That deal was a template for the kind of collaboration that many argue is now essential. Without cooperative action, former Secretary of State Henry Kissinger warned at last week's Bloomberg New Economy Forum, "the world will slide into a catastrophe comparable to World War I." John Kerry  This week in the New Economy Saudi oil exports drop in September with oil revenue down 39%. South Korea unveils artificial intelligence chip to stay on top. Africa is looking to China and Russia for Covid-19 vaccines. Moody's says Nigerian banks are more equipped for expansion. Carrie Lam envisions Hong Kong "as just another Chinese city."   Kerry is clearly keen to reprise his role as the Beijing bridge-builder. "While some have decided that we are entering a new Cold War with China, we can still cooperate on critical mutual interests," he said in the New York Times last month, calling for joint action to protect the Southern Ocean. Geopolitics, he insisted, "must stop at the water's edge." Some critics, however, contend that Kerry, under President Barack Obama, gave up too much in return for Chinese acquiescence on climate—for instance, by soft-pedaling human rights—and they fear a Biden presidency may make the same mistake. "Sending Mr. Kerry to ne­go­ti­ate with Chi­nese Pres­i­dent Xi Jin­ping on cli­mate is a recipe for re­turn­ing home dressed in a bar­rel," said the Wall Street Journal editorial page, typically not a fan of the Obama administration. But U.S. public attitudes on China have hardened since the Obama days, and few expect a Biden White House will go any easier on China over contentious issues like Uyghur detention camps or the militarization of the South China Sea. Indeed, Biden's expected pick to head the Pentagon, Michèle Flournoy, is very much the hawk. In a recent article in Foreign Affairs, she suggested that "if the U.S. military had the capability to credibly threaten to sink all of China's military vessels, submarines, and merchant ships in the South China Sea within 72 hours, Chinese leaders might think twice before, say, launching a blockade or invasion of Taiwan." Michèle Flournoy It's clear that strategic rivalry is now hard-wired into the U.S.-China relationship, and there's a growing acknowledgment by figures in both Washington and Beijing that—while it can be mitigated—it's unlikely to be resolved by any effort to get along. Certainly, Chinese leaders are digging in for protracted hostilities, so much so that President Xi Jinping is reorienting the entire economy toward "self-reliance," fearing continued U.S. trade tariffs, technology embargoes and financial sanctions. In congratulating Biden on his win, President Xi Jinping alluded to these gathering tensions, but also the need to manage them. The official Xinhua News Agency quoted Xi as saying he "hopes that the two sides will uphold the spirit of non-conflict, non-confrontation, mutual respect and win-win cooperation, focus on cooperation, manage differences [and] advance the healthy and stable development of China-U.S. ties." Pandemic control is an obvious area of collaboration, along with mass migration and financial stability. On climate, says Fu Ying, a former Chinese ambassador and vice foreign minister, "the world expects China and the U.S to play a leading role, and the two countries have a lot to work on together." Kerry won't save the U.S.-China relationship. But one could argue that a joint effort to save the planet would increase the odds that the two countries will avert disaster. Public Health: A public-private vaccine takes shape The good news is that proposed BioNTech-Pfizer and Moderna vaccines indicate 95% effectiveness rates against Covid-19, according to the companies. If shown to be true by independent analyses, this would be quite the coup given that the U.S. Food and Drug Administration set the bar for approval at 50%—about the equivalent of a flu shot. The even better news—that Oxford University and AstraZeneca reported their proposed vaccine handily beat the low threshold with an efficacy rate of up to 90%—has now been clouded by uncertainty about the test data. A new trial seems to be in the offing to clear everything up, but that will take up more precious time. The hopes of the developing world are riding on this vaccine. Unlike the BioNTech-Pfizer drug, which requires ultra-cold storage, and Moderna's, which requires freezer-cold storage, AstraZeneca's shot can be kept in a fridge. That, plus its price tag—$3 to $4 a dose, a fraction of the other two—means that poorer countries that lack cold-storage supply chains could be part of the global vaccine roll-out. Wealthier countries have been muscling their way to the front of the queue for potential vaccines by essentially waving their checkbooks. In contrast, AstraZeneca promised its Covid-19 jab on a not-for-profit basis to the entire world for the duration of the pandemic, and to the poorest countries "in perpetuity." Non-profits funded by the Bill and Melinda Gates Foundation are helping to fund its manufacturing. If AstraZeneca's vaccine ultimately proves successful, it would be a monumental victory for global public health—and a prime example of the power of public-private partnerships to resolve global problems. Finance: Central banks can't do it alone Just a few days after appearing on a finance panel at last week's Bloomberg New Economy Forum, former Federal Reserve Chair Janet Yellen was picked to become the new Treasury Secretary. Janet Yellen Her message at the Forum: As the Fed tries to support the job market, especially during the pandemic, it can't do it alone. "We have to have fiscal policy, structural policy other than just relying on central banks to achieve healthy growth," she said. As the most powerful financial woman in the world, Yellen will soon be in a position to turn those sentiments into policy. __________________________________________________________ For a limited time, get 50% off for a full year of unlimited digital access to Bloomberg's unparalleled, data-driven journalism. For the latest developments in the new economy, turn to the most trusted name in business reporting backed by the biggest global newsroom. The Bloomberg 50 is Bloomberg Businessweek's celebration of the year's most notable icons and innovators as well as our identified Ones to Watch. On Dec. 3, we reveal the 2020 honorees live in a dynamic virtual event. Sponsored by Salesforce, the program will feature conversations with International Monetary Fund Managing Director Kristalina Georgieva, Mastercard President Linda Kirkpatrick, Emmy-winning director Jason Hehir, DJs Swizz Beatz and Timbaland and many more. Register here. 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