Canada moves on from vaccine partnership with China, blaming it for delaying critical shipment

August 28, 2020, 9:50 AM UTC

Canada’s once-promising vaccine partnership with Chinese vaccine maker CanSino appears to be over.

This week, Canada’s National Research Council (NRC) announced that it has ended its partnership with CanSino due to months of ongoing delays in receiving Cansino’s Phase I vaccine trial shipment.

“It’s evident that the opportunity [with CanSino] is over,” NRC president Iain Stewart told Canadian newspaper the Globe and Mail this week.

Canadian Prime Minister Justin Trudeau originally announced the CanSino partnership on May 16, saying that the Chinese vaccine maker would partner with Canada’s Dalhousie University to conduct the Phase I clinical trials.

But, over four months later, the supplies for the vaccine have yet to arrive. Health Canada, a government agency that oversees the country’s health policy, told Fortune in early August that the shipment had “not yet been approved by Chinese customs.”

As of this week, the shipment still appears to be caught in customs. “Due to the delay in the shipment of the vaccine doses to Canada, the NRC has since moved on to focus our team and facilities on other partners and COVID-19 priorities,” the NRC said in a statement this week.

China’s government has not commented on the shipment, but CanSino founder Yu Xuefeng lashed out at Chinese customs authorities this week, telling the Globe and Mail that government decision making around vaccine research is “too complicated,” and the time to the trials has “already passed.”

CanSino later clarified to Chinese media that while its shipment remains held in customs, its partnership with the NRC hasn’t been officially terminated.

Yu originally appeared to be an ideal candidate to partner with Canada on vaccine research, given that he spent decades as a vaccine researcher in Canada with the French pharmaceutical giant Sanofi Pasteur before moving to China and founding CanSino in 2009.

Yet even his close ties to the Canadian pharmaceutical industry and with Chinese authorities—CanSino is partnering with the military-run Academy of Military Medical Sciences on its vaccine research—did not prove enough to make the partnership work.

Earlier this month, Yanzhong Huang, a senior fellow for global health at the Council on Foreign Relations, told Fortune that the lengthy delay would only make sense if it was done for political reasons.

Some observers have said China may have been holding the shipment as leverage to pressure Canada to send Meng Wanzhou, a former Huawei executive and daughter of Huawei founder Ren Zhengfei, back to China. Meng was detained upon arriving at Vancouver’s airport in December 2018 at the request of U.S. authorities. She remains under house arrest in Vancouver while her lawyers fight a U.S. request to have her extradited to New York to face fraud charges. American prosecutors allege that in order to get financial services, Meng lied to banks about Huawei’s relationship with an unofficial subsidiary in Iran called Skycom.

Meng and Huawei deny the U.S. charges. Chinese officials have denounced Trudeau for colluding with what they claim is a political move by the Trump administration to constrain China’s rise as a global technology power.

China is holding two Canadians, former diplomat Michael Kovrig and entrepreneur Michael Spavor, who were arrested on unspecified national security charges in apparent retaliation for Canada’s arrest of Meng. On Tuesday, Canadian Minister of Foreign Affairs Francois-Philippe Champagne appealed for the release of the two men during a meeting with Chinese foreign minister Wang Yi in Rome.

China appears to have rebuffed the plea. Foreign ministry spokesman Zhao Lijian, speaking to reporters in Beijing Wednesday, said, “The Canadian side is well aware of the crux of the problem and should immediately take effective measures to correct the mistakes and create conditions for the bilateral relationship to get back on track.”

“It’s likely that the shipment is being delayed as part of China’s retaliation against Canada over the Meng [Wanzhou] arrest,” David Mulroney, former Canadian ambassador to China, told Canada’s National Post.

The Chinese state media outlet the Global Times refuted this notion on Thursday, suggesting that the shipment was likely delayed either because Canada’s relative success against the coronavirus has made it a less viable location for the trials or that CanSino’s candidate uses portions of Canadian technology, raising potential legal questions should the vaccine supplies be shipped to Canada.

CanSino, meanwhile, announced partnerships this month with Russia, Saudi Arabia, Pakistan, and Mexico to launch Phase III clinical trials.