[EAI Working Paper] Post-COVID World Political Economy Series ③_ US-China Regional Strategy Competition in the COVID-19 Era: The Political Economy of Vaccine Diplomacy

I. Introduction

As indicated by the over 220 million confirmed cases and 4.57 million deaths globally as of September 2021, COVID-19 is[1]a global health security crisis. Furthermore, COVID-19 has caused immense economic repercussions, as evidenced by the -3.3% global economic growth rate in 2020 (IMF 2021). While the initial spread of COVID-19 primarily affected developed countries like the US and Europe, its global dissemination has disproportionately impacted developing countries with limited capacity in both epidemic prevention and economic response. While developed countries focused on balancing epidemic control with economic vitality, countries with relatively weaker capacities to respond to the shock of COVID-19, such as India, Brazil, and Indonesia, have shown limitations even in minimizing economic damage.

The COVID-19 pandemic has spurred projections of changes in the dynamics of US-China strategic competition and the existing international order (Campbell and Dosh 2020; Green and Medeiros 2020; Haass 2020; Nye 2020). Although opinions differ on the direction of change, there is consensus that COVID-19 will have a significant impact on the international order. The US-China strategic competition, which began with trade wars, prioritized a bilateral approach to extract concessions from China. However, the global challenge of COVID-19 has acted as a catalyst for both the US and China to promote strategic competition not only bilaterally but also at regional and global levels. This is particularly true given that COVID-19 has created a conflict dynamic between developed and developing countries, or the West and non-West, in vaccine development, production, and distribution. Thus, post-COVID-19 US-China strategic competition has evolved into a simultaneous unfolding of competition at bilateral, regional, and multilateral levels.

This article proceeds from the premise that COVID-19 has led to a more distinct competitive landscape between the regional strategies of the United States and China. Post-COVID-19, both the US and China, which previously focused on bilateral competition and negotiations, have pursued a shift towards increasing the relative importance of their regional strategies. Given that COVID-19 was a global challenge, bilateral competition alone could not be the key to solving the problem, and the practical necessity of expanding the scope of cooperation to the regional level increased. COVID-19 has prompted the US and China to closely link vaccine development, production, and distribution with their regional strategies, and more broadly, has influenced the formation of regional competitive dynamics in various fields such as advanced technology, telecommunications, supply chains, and space.

II. US-China Regional Competition Post-COVID-19

1. Changes in the Competitive Landscape between the Belt and Road Initiative and the Indo-Pacific Strategy Post-COVID-19

While US-China strategic competition primarily occurred at the bilateral level before COVID-19, as seen in the US-China trade war, post-COVID-19 strategic competition is shifting beyond the bilateral level to regional and multilateral competition based on inter-state alliances. In this regard, COVID-19 has acted as a factor causing changes in the patterns of US-China strategic competition, with regions becoming strategically important as arenas that link competition at bilateral and multilateral levels. Regional strategies are of great strategic significance as they play a crucial role in overcoming the limitations of bilateral strategies and securing advantageous positions in the process of establishing a multilateral order, thus becoming a new arena for competition between the US and China.

As both the US and China have revealed limitations in their capacities to respond to COVID-19, they face weakened leadership in conducting strategic competition. To mitigate this leadership vacuum, both countries are prioritizing the strengthening of regional multilateral cooperation. Amidst the Biden administration's declaration of strengthening multilateralism and international cooperation, it is actively seeking to enhance international cooperation to implement the Indo-Pacific Strategy, which is still in its vision and planning stages, on a sector-by-sector basis. In response, China is flexibly adapting by shifting the strategic focus of the Belt and Road Initiative from traditional infrastructure construction to advanced technology cooperation.

The Belt and Road Initiative (BRI) was ambitiously launched by the Xi Jinping administration with the stated goal of promoting regional integration through enhanced connectivity. However, the opacity in the decision-making and implementation processes of BRI projects has led to suspicions that China is strategically leveraging the initiative (Goldstein 2020). As seen in the 'debt trap' controversies in Sri Lanka, Djibouti, and Myanmar, China has faced criticism for using the BRI as leverage to expand its political and diplomatic influence over partner countries. Furthermore, Xi Jinping's assertive diplomacy through the BRI has led to successive conflicts not only with Japan, which has been competing to reshape the regional order, but also with South Korea, Australia, and India. It has also generated concerns and backlash within Southeast Asia, a key region for the BRI. Since 2018, the Xi Jinping administration has recognized these criticisms (Xi 2018) and begun to seek certain changes in the BRI (Sun 2018).

Meanwhile, the receptiveness of developing countries to the BRI has increased post-COVID-19. China's ability to overcome participant countries' backlash relatively early and normalize the BRI is related to the acceleration of the global economic downturn caused by the US-China trade war and the spread of COVID-19. As BRI participating countries facing economic recession have an increased need for economic stimulus through infrastructure construction, their acceptance of the BRI has grown. The Chinese government has made multifaceted efforts to alleviate criticism that it uses debt repayment pressure as leverage over developing countries to create infrastructure asymmetry, thus largely dispelling the 'debt trap' controversy. To mitigate the financial risks of BRI projects, the Chinese Ministry of Finance approved the 'BRI Financing Guidelines' jointly with 26 countries (Liu 2020). Furthermore, by participating in the G20's 'Debt Service Suspension Initiative for Poorest Countries (DSSI)', China deferred debt payments totaling $1.35 billion, the largest amount among G20 members, demonstrating agile response to changing circumstances. These efforts by the Chinese government have eased concerns about the debt trap and signify China's participation in global governance efforts through the G20 to resolve debt relief issues (Wang 2021).

China's efforts to resolve debt issues at a multilateral level have had a positive impact, allowing for the resumption of projects that had been halted due to opposition from some countries and the rapid initiation of new projects. The $20 billion East Coast Rail Link project in Malaysia has been resumed, and the Jakarta-Bandung high-speed rail project in Indonesia has also been normalized. Consequently, from January to August 2020, China's non-financial investment in BRI participating countries increased by 31.5% year-on-year to $11.8 billion, and the value of new contracts signed by Chinese companies with BRI participating countries reached $73 billion, accounting for 54% of China's total new contracts.

Meanwhile, the Indo-Pacific Strategy, led by the United States, has evolved through three stages but faces a 'dilemma of institutionalization.' The fundamental reason for these difficulties is the US's failure to exercise the 'executive leadership' necessary to resolve collective action problems that may arise during the implementation of the Indo-Pacific Strategy, and the 'ideological leadership' that helps participating countries identify common interests (He and Feng 2020). However, COVID-19 has acted as a catalyst, prompting the US government to move the Indo-Pacific Strategy from the conceptual stage to the implementation stage.

2. Formation of Sector-Specific Regional Competitive Dynamics due to COVID-19

COVID-19 provided an opportunity for the US and China to concretize the competition between the Belt and Road Initiative (BRI) and the Indo-Pacific Strategy. As evidenced by the announcement of the Economic Prosperity Network (EPN) and the Blue Dot Network (BDN), the US has moved to resolve the institutionalization dilemma in pursuing the Indo-Pacific Strategy and to present alternatives to the BRI on a sector-by-sector basis. Through the BDN, the US has provided a new option for Indo-Pacific countries seeking alternatives to the BRI by clearly outlining high-quality infrastructure investment and financing methods. The BDN has emerged as an initiative with the potential to develop into a new economic alliance that counters the BRI by linking alternative supply chains with high-quality infrastructure construction. Furthermore, its nature as a multistakeholder initiative, involving government, the private sector, and civil society in transparently financing the $26 trillion required for infrastructure development in Asia, positions it as an alternative to the BRI (Panda 2020). The US is further enhancing the feasibility of the Indo-Pacific Strategy by concretizing programs such as Asia EDGE, the Indo-Pacific Business Forum, and Build ACT, and by gradually specifying financing methods.

In this process, the US and China are utilizing regional strategies as a means of technological competition. US-China technological competition in areas such as 5G, e-commerce, space, and cybersecurity is actively underway, mediated by the Indo-Pacific Strategy and the BRI. These sectors are characterized by close economic-security linkages, and both the US and China are entering into competition to expand their influence based on regional frameworks. It is important to note that the US is establishing the Indo-Pacific Strategy as a new arena for technological competition. The US's continuous expansion of sanctions against Huawei and its efforts to strengthen international cooperation for the effective implementation of these sanctions, while simultaneously promoting the BDN and EPN, indicate that the US is utilizing the Indo-Pacific Strategy as a new theater for technological competition. Although initiatives like Clean Network and 5G Clean Path are not exclusively regional, their inevitable linkage with programs like EPN and BDN clearly demonstrates the US's intention to use the Indo-Pacific Strategy as a key instrument for containing China. Thus, the Indo-Pacific Strategy and the BRI are being utilized as major means of US-China strategic competition, forming competitive dynamics in key areas.

III. US-China Regional Competition: Key Cases

1. Infrastructure Competition

Given that the initial goal of the Belt and Road Initiative (BRI) was to enhance connectivity among regional countries through infrastructure construction and thereby promote regional integration, the Blue Dot Network (BDN) can be seen as a regional infrastructure construction project pursued by the US, Japan, and Australia in response to the BRI. As evidenced by the establishment of the U.S. International Development Finance Corporation (USDFC), the US is concretizing implementation plans, including financing methods, beyond mere declarations to enhance the realism of regional infrastructure construction. In this regard, the DFC announced various support programs at the Indo-Pacific Business Forum (IPBF) in October 2020, including energy diversification (Vietnam), inclusive finance (Cambodia), sustainable fisheries (Vietnam), enhanced connectivity (Myanmar), telecommunications cable construction, energy security enhancement (Indonesia), and expanded financial access for smallholder farmers (India) (USDFC 2020). Japan, since announcing the Partnership for Quality Infrastructure (PQI) in 2015 (MOFA et al. 2015), has begun to pursue it in conjunction with its Indo-Pacific Strategy (Panda 2020).

2. DSR and Clean Network

The US has also initiated regional competition in advanced technology and supply chains. China has altered the nature of the BRI, which previously focused on traditional infrastructure construction, to prioritize digital infrastructure development. This shift by China is related to delays in BRI projects, financing issues, and concerns and backlash regarding the 'debt trap.' Through the Digital Silk Road (DSR), China aims to build digital infrastructure in BRI participating countries and is attempting a strategic transition to prepare for US-China technological competition. The DSR was first introduced in 2015 as a component of the BRI. Post-COVID-19, the DSR is being utilized as a means for China to expand its influence in advanced technology sectors to gain an advantageous position in its strategic competition with the US. At the BRI Forum in April 2020, the Chinese government announced that while the DSR has recently focused on digital service sectors such as e-commerce, smart cities, telemedicine, and internet finance, it will also pursue technology innovation sectors such as big data, IoT, AI, blockchain, and quantum computing in the future.

In response, the US, primarily through the Department of State, has promoted the Clean Network initiative, warning of the risks inherent in Chinese network equipment and strengthening regional cooperation (Department of State 2017). Following the Trump administration, the Biden administration is also expected to continue the 5G competition between the US and China by expanding and strengthening international cooperation to enhance the effectiveness of sanctions against Huawei and by promoting the Clean Network. In response, the Chinese government is also shifting the focus of the BRI from traditional infrastructure construction to advanced technology sectors. This indicates that the Chinese government intends to utilize the DSR for strategic competition between the US and China, and the importance of the DSR is expected to grow further as US-China technological competition intensifies in advanced technology fields such as 5G and cloud services. Post-COVID-19, both the US and China are actively using regional strategies as a means to secure advantageous positions in advanced technology competition, marking a significant shift in the focus of regional strategies towards close alignment with strategic competition.

3. Supply Chains: Red Supply Chain and EPN/SCRI

The disruption of supply chains due to COVID-19 has accelerated China's reconstruction of its red supply chain, as China occupies a hub position in global supply chains. In the early stages of the COVID-19 outbreak, China faced simultaneous challenges such as decreased investment and consumption due to supply chain disruptions. The pressure to compensate for supply chain vulnerabilities has intensified as the US pursues decoupling as part of its strategic competition. As the US government implements strategies to block key links in advanced technology sectors such as semiconductors and 5G, the need for supply chain restructuring has increased due to declining confidence in the supply capabilities of Chinese companies. Through its 'dual circulation policy,' the Chinese government is accelerating independent technological development in industries with high external dependency on materials and intermediate goods, such as semiconductors, chemicals, and transportation equipment, to overcome post-COVID-19 economic recession and respond to US-China strategic competition. Simultaneously, China is pursuing a strategy to overcome supply chain vulnerabilities by reconstructing its red supply chain. On one hand, China is attempting to reconstruct its red supply chain. The EPN proposed by the Trump administration and the reshoring efforts by the Biden administration indicate the increasing necessity for the US to pursue decoupling realistically. Given that China's appeal as a production base and consumer market remains strong, a complete overhaul or decoupling of supply chains is unlikely. However, partial adjustments are inevitable for managing supply chain vulnerabilities. The Biden administration is therefore increasing pressure on China through a combination of policies such as export controls, reshoring, and supply chain restructuring, going beyond the EPN.

The Regional Comprehensive Economic Partnership (RCEP) can serve as a useful tool for China to reshape the regional economic order in its favor. It is noteworthy that China, which has historically preferred bilateral FTAs, having signed bilateral FTAs with most RCEP participating countries and prioritizing negotiations for a Sino-Japanese-Korean FTA, has participated in this mega-FTA. From China's perspective, two-thirds of its trade with RCEP participants is with US allies. Therefore, the conclusion of RCEP negotiations signifies China securing strategic space in the future process of regional economic order transformation by expanding economic integration with US allies in Asia.

The Supply Chain Resilience Initiative (SCRI) is the first attempt to form a production alliance based on geopolitical interests aimed at countering China amidst the spread of COVID-19. It aims to respond to the increased influence of China in regional supply chains through RCEP. As Chinese companies have expanded and strengthened supply chain linkages with Southeast Asian countries by leveraging their technological capabilities and regional advantages, the SCRI seeks to mitigate supply chain vulnerabilities by providing financial support that offsets these Chinese strengths.

4. Space Competition

US-China competition at the regional level is also evident in the space industry. While the US has traditionally maintained international space cooperation with Asian countries, China is seeking to alter the existing cooperative framework by pursuing technological advancements in its space industry. With the full operation of the Beidou navigation system, China is challenging the US's monopolistic position by providing Beidou services in the Indo-Pacific region. As demonstrated by the formation of the BRI Space Information Corridor (Jiang 2019), China is attempting to establish its own sphere of influence by strengthening cooperation with BRI countries. This represents a challenge not only at the regional but also at the global level to the US-centric space order.

IV. US-China Competition and Regional Strategies Post-COVID-19

1. The Rise of Vaccine Diplomacy Post-COVID-19: Competition in Vaccine Development and Supply Chains

The Trump administration exhibited a 'my country first' approach in its response to the COVID-19 crisis, prioritizing national interests over multilateral cooperation. Despite the unprecedented global crisis of a pandemic, the Trump administration was more active in criticizing the shortcomings of existing multilateral systems than in exercising leadership for multilateral cooperation. Although the Trump administration later announced plans to invest $2.5 billion to respond to the global spread of COVID-19, it excluded international cooperation programs through the WHO from its scope due to strong distrust of the organization. The Trump administration's distrust of multilateralism did not dissipate even as the spread of COVID-19 accelerated. This perspective was reaffirmed by Vice President Mike Pence's statement that multilateral institutions are inefficient organizations that waste resources. Subsequently, the US continued to criticize the WHO as being under China's influence, deriding it as the 'Chinese Health Organization' (CHO) rather than the WHO, thus failing to clearly express its intention to restore multilateral cooperation for COVID-19 response (Sajjanhar 2020).

The vacuum in US leadership contributed to an international environment where other developed countries also pursued self-interest. As shown in [Figure 1], a 'vaccine divide' emerged, where developed countries purchased more vaccines than necessary, while developing countries secured far less than needed. The weakened international cooperation during the initial US response to COVID-19 had particularly dire consequences for developing countries.

[Figure 1] Vaccine Needs vs. Purchases by Income Level

Source: Biyani and Graham (2021).

China's vaccine diplomacy is being utilized as a diplomatic tool amidst accelerating US-China strategic competition and rising distrust towards China. Vaccine diplomacy, which has replaced mask diplomacy, has the potential to mitigate Sinophobia and expand China's influence ('China’s Vaccine Diplomacy: Partnering for trials in at least 16 countries worldwide' 2020). In August 2020, China National Biotec Group, a subsidiary of China National Pharmaceutical Group, agreed to cooperate on Phase III trials for COVID-19 vaccines with countries including Peru, Morocco, and Argentina ('Dawn of hope: Global cooperation in COVID-19 vaccine development' 2020). While conducting Phase III trials, China also entered into competition to establish supply chains. Germany's BioNTech SE decided to expand its manufacturing facilities in Germany to produce COVID-19 vaccines for the Chinese market. BioNTech SE is jointly developing vaccines with the US's Pfizer and China's Shanghai Fosun Pharma; once its production capacity is expanded, it is expected to produce 750 million doses annually.

China skillfully utilized vaccine diplomacy by exploiting the vacuum left by the US's lack of swift action in international cooperation while pursuing a 'my country first' policy. A prime example is China's rapid response in December 2020, when Pfizer announced a reduction of its planned supply by half due to supply chain issues; the Chinese government promptly offered to provide approximately 600 million doses. This response not only placed Chinese vaccines in competition with Western pharmaceutical vaccines but also represented a broader challenge to the existing order that Western advanced pharmaceutical companies had long established and maintained through their technological superiority in R&D and their control over supply chains in production. China has secured an opportunity to emerge as an alternative to Western vaccine companies facing supply shortages in securing raw materials and operating production facilities. Notably, Chinese vaccine manufacturers are considered to have secured production stability compared to Western companies by utilizing robust domestic supply chains for vaccine production.

While controversies surrounding the efficacy and safety of Chinese vaccines have not entirely disappeared, Chinese vaccines remain attractive to countries with limited medical facilities that must rely solely on lockdowns due to the rapid spread of COVID-19. In particular, compared to the 'my country first' policies of developed nations stockpiling large quantities of vaccines for their own populations and for potential future booster shots, China's supply of 350 million doses to 80 countries presents a stark contrast (Hollingsworth et al. 2021). The Chinese government promoted Sinopharm and Sinovac vaccines as 'Chinese vaccines,' a stark contrast to the promotional and distribution methods of vaccines developed in the US and UK by AstraZeneca, Pfizer, and Moderna. Although controversies regarding efficacy and safety persist, the Chinese government's large-scale distribution of 'Chinese vaccines' overseas represents an attempt to differentiate itself from developed countries, including the US, from a national strategy perspective.

Vaccine diplomacy serves as a tool to alleviate Sinophobia and expand influence, while also acting as a new testing ground for Chinese diplomacy, learning from the lessons of mask diplomacy. In September 2020, the Chinese government expressed its willingness to participate in international cooperation for COVID-19 vaccine development (Hu 2020). China's vaccine diplomacy is proceeding in three stages: experimentation, production, and distribution. As COVID-19 cases declined rapidly, China could no longer conduct vaccine trials domestically, necessitating international cooperation for swift Phase III trials. Foreign cooperation was particularly essential for large-scale trials to assess the efficacy and safety of vaccines.

China began conducting clinical trials for its vaccines in nine Belt and Road Initiative participating countries, starting with Sinopharm, Sinovac, and CanSinoBIO, and subsequently expanded the number of participating countries to 18 in Latin America, Southeast Asia, and the Middle East. Specifically, in August 2020, China National Biotec Group, a subsidiary of China National Pharmaceutical Group, agreed to cooperate on Phase III trials for COVID-19 vaccines with countries including Peru, Morocco, and Argentina. China-Brazil vaccine cooperation continued in 2021. In July 2021, Brazil's National Health Surveillance Agency (ANVISA) approved Phase III trials for a vaccine developed by the Institute of Medical Biology, Chinese Academy of Medical Sciences (中国医学科学院医学生物学研究所), following approvals in April and July 2020. Approximately 7,900 Brazilians are expected to participate in this Phase III trial, which involves 34,000 participants globally.Global Times 2021/7/15). By conducting Phase III trials in developing countries with relatively weak COVID-19 response capabilities, China laid the groundwork for its vaccine diplomacy.

Vaccine trials were followed by overseas production of Chinese vaccines. Sinovac, for instance, was able to expand its Phase III trials to 10 countries, building on the trials initiated in six countries including the UAE, Bahrain, and Peru. China subsequently pursued technological cooperation for vaccine production with countries like Malaysia and the UAE, initiating overseas production and thus expanding international cooperation in vaccine development and production. The UAE not only granted emergency approval for the Sinopharm vaccine in December 2020 but also began producing it domestically (Watanabe and Hadano 2020). Sinovac conducted Phase III trials in Indonesia and Brazil, with Indonesia becoming the first country to receive Sinovac vaccines. Through these processes, by January 2021, China had secured supply agreements with 26 countries based on cooperation in vaccine development. The signing of these vaccine supply agreements, contingent on the approval of Chinese vaccines, signifies that these agreements were made without fully established trust in Chinese vaccines, potentially serving as a bridgehead for China to supply vaccines to more countries in the future.

Based on this cooperation, China has been able to participate in the competition to form vaccine supply chains. While the development and supply chain management of vaccines have been dominated by a few pharmaceutical companies in developed countries, numerous countries are involved in procuring raw materials and components for vaccine production. The vaccine production supply chain involves many countries, and a bottleneck at any single point can disrupt the normal functioning of the entire supply chain. In the case of COVID-19 vaccines, production is significant not only in the US and Europe but also in China and India, with many countries supplying raw materials and components, leading to a highly vulnerable supply chain. As shown in [Figure 2], the vaccine supply chain consists of various value chains, including raw materials such as adjuvants, preservatives, stabilizers, and antibiotics, as well as components like stoppers, vials, syringes, and needles during the production stage, and dry ice, cold boxes, vaccine carriers, and vaccine freezers in the post-production delivery system. A problem at any one of these points can cause disruptions in vaccine supply. Furthermore, China is the country most extensively involved in the vaccine supply chain, participating in the procurement of adjuvants, stabilizers, antibiotics, syringes, vials, stoppers, cold boxes, and vaccine freezers. While developed pharmaceutical companies develop vaccine raw materials, China has secured stable production capacity based on its supply chain by independently developing COVID-19 vaccines.

[Figure 2] Vaccine Supply Chain

Source: KoreaBIO (2021).

China has secured an advantage in distributing vaccines to developing countries based on its domestic vaccine production capacity. The distribution of the six types of vaccines currently being administered shows significant differences based on a country's income level. Developed countries have secured most of the supplies of Moderna and Pfizer vaccines. In contrast, China is distributing Sinovac and Sinopharm vaccines to developing countries. Countries to which China has exported or donated vaccines are concentrated in Southeast Asia, the Middle East, Central Asia, Africa, and Latin America. While developed countries pursued vaccine nationalism, China was able to rapidly distribute vaccines to developing countries, despite the fact that trust in Chinese vaccines has not been fully established. In the process of distributing vaccines to developing countries, China is making efforts in various ways to increase its connection with the Belt and Road Initiative, such as by dispatching medical teams. China has also reportedly made significant investments in purchasing, transportation, and establishing cold chains to ensure timely and sequential vaccine supply (Hu 2020). As a result, a divide is emerging between developed and developing countries, and furthermore, between the West and the non-West, in vaccine distribution ([Figure 3] refers).

[Figure 3] Distribution Areas of Chinese Vaccines

Source: Bridge (2021).

As a result of vaccine diplomacy, China has achieved tangible outcomes, including obtaining approval for Chinese vaccines in over 100 countries and being included in the WHO's Emergency Use Listing and COVAX's procurement list. Based on these achievements, the Chinese government has announced plans to provide its domestically developed vaccines as a global public good, striving to enhance their efficacy and set reasonable prices. Indeed, as of September 2020, China has donated vaccines to over 100 countries and exported vaccines to more than 60 countries. The total volume of vaccines supplied by China overseas to date amounts to 770 million doses. Regarding joint vaccine production, China has established production facilities in four countries—the UAE, Egypt, Indonesia, and Brazil—and commenced production, thereby supporting vaccine self-sufficiency in developing countries. As a result of vaccine diplomacy, in August 2021, Chinese Foreign Ministry spokesperson Wang Wen declared at the International Forum on COVID-19 Vaccine Cooperation that China had achieved 'four firsts.' The cooperation mentioned by Spokesperson Wang includes: (1) sharing the genetic sequence of the coronavirus with the world to promote vaccine R&D, (2) conducting Phase III trials with over 20 countries for COVID-19 vaccine development, (3) providing vaccines to developing countries worldwide despite surging domestic demand for Chinese vaccine production capacity, and (4) cooperating with developing countries for vaccine production (Ministry of Foreign Affairs 2021b).

2. Strategic Dimensions of Vaccine Competition

1) United States

The United States was passive in vaccine diplomacy, focusing primarily on domestic COVID-19 response. It adopted a defensive stance, merely attempting to counter China's vaccine diplomacy by leveraging the growing distrust towards China during the pandemic's spread. However, since the inauguration of the Biden administration, US vaccine diplomacy has changed in two aspects. First, since March 2021, the US has actively engaged in vaccine diplomacy through the Quad or Quad Plus framework, initiating a competitive dynamic with China in the Indo-Pacific region. The US has included vaccine cooperation in the Quad working group, making it a priority cooperation agenda for the Indo-Pacific Strategy, and is also using it to expand the Quad to include countries like South Korea, New Zealand, and Vietnam. The Biden administration has also decided to promote increased vaccine production capacity in India as part of strengthening Quad cooperation (White House 2021). At the Quad summit in March 2021, plans were made to expand production capacity to supply 1 billion doses to Southeast Asian countries, signaling a move to counter China's vaccine diplomacy (Widakuswara 2021).

Second, the Biden administration has adopted a proactive stance as a latecomer to vaccine diplomacy, proposing a temporary waiver of vaccine intellectual property rights. The competitive procurement of vaccines by developed countries, including the US, has severely hindered vaccine access for developing countries. As one measure to alleviate the vaccine divide, the Biden administration agreed to an emergency measure to temporarily suspend intellectual property rights for COVID-19 vaccines (Kaplan et al. 2021). This decision is significant as it was made despite European opposition. Although the Biden administration did not succeed in reaching an international consensus on the temporary suspension of intellectual property rights, its alignment with most developing countries that support this measure is noteworthy ([Figure 4] refers). This action by the Biden administration can be seen as a response to China's vaccine diplomacy, which is focused on developing countries.

[Figure 4] National Positions on Vaccine IPR Waiver

Source: MSF (2021).

2) China

(1) Quantum Dimension

The Chinese government presented the narrative of providing vaccines at affordable prices to developing countries as a global public good in its external outreach, but in reality, it pursued vaccine diplomacy with high strategic considerations. China's vaccine diplomacy gained momentum with the priority supply of UN PKO vaccines deployed in Africa, followed by the provision of 160 million doses to 18 countries. Uzbekistan, Ukraine, Maldives, Angola, and Sudan are among the priority recipients of Chinese vaccines. Among these, Uzbekistan's case is largely a reward for the participation of 7,000 of its citizens in clinical trials for Chinese vaccines. Subsequently, China pledged priority vaccine supply to Southeast Asian countries such as the Philippines, Cambodia, and Malaysia. Thus, China demonstrated a strategic move by prioritizing vaccine supply to developing countries in Southeast Asia, Africa, and Central Asia, which are key regions for the Belt and Road Initiative.

[Figure 5] Countries Participating in China's Phase 3 Vaccine Trials and Priority Vaccine Recipients

Source: Tan and Maulia (2020).

The Chinese government is actively engaged in the overseas distribution of vaccines developed in China, particularly focusing on Southeast Asian countries. As evidenced by the Chinese Ministry of Foreign Affairs' pledge in July 2020 to prioritize vaccine supply to the Philippines and Sinovac's agreement in August with the Indonesian state-owned pharmaceutical company PT Bio Farma to supply 250 million doses annually, China is intensifying its vaccine diplomacy in countries involved in the South China Sea dispute. As shown in [Figure 5], China conducted extensive Phase 3 trials in the Middle East (Bahrain, Jordan, UAE, Saudi Arabia), Asia (Bangladesh, Indonesia, Pakistan), South America (Argentina, Peru, Brazil), and Africa (Egypt, Morocco), and designated Southeast Asian countries such as Cambodia, Laos, Malaysia, Myanmar, the Philippines, Thailand, and Vietnam as priority recipients for vaccine supply. While the surge in COVID-19 cases in countries like Indonesia and the Philippines contributed to the concentration of priority vaccine supply in Southeast Asia, China's motivation to link vaccine distribution with significant diplomatic issues, such as the South China Sea and East China Sea disputes, also played a role, given that Southeast Asia is a stage for US-China strategic competition.

China is leveraging vaccine cooperation to resolve diplomatic issues with partner countries. In September 2020, despite a recurrence of the China-Indonesia maritime standoff in the South China Sea, both countries showed restraint in escalating the situation, unlike in the past. Foreign Minister Wang Yi pledged priority vaccine supply to Malaysia, which has maritime disputes with China, while also demanding the release of 60 Chinese sailors detained for trespassing in Malaysian waters. China also pursued assertive diplomacy concerning the South China Sea with the Philippines, where COVID-19 cases were rapidly increasing. President Rodrigo Duterte, who had previously been highly critical of China, refrained from public criticism during vaccine negotiations, which can be considered an unseen achievement of vaccine diplomacy (Tan and Maulia 2020).

This development is interpreted as having the effect of deterring Southeast Asian countries, facing urgent vaccine needs due to the surge in COVID-19 cases, from escalating conflicts with China. Notably, as India, which had been supplying vaccines to developing countries, temporarily suspended vaccine exports (Nebe 2021), Southeast Asian countries, including Indonesia, became more dependent on Chinese vaccines. As the balance between vaccine supply and demand was disrupted, developing countries in Asia, Africa, and South America increasingly needed Chinese vaccines. The conciliatory stance adopted by countries like Indonesia and Malaysia, which have experienced disputes with China, towards China can be seen as a strategic cost incurred to secure vaccine supplies.

Furthermore, China has linked vaccine supply to the realization of various diplomatic objectives. A prime example is China's priority supply of vaccines to Brazil, which was tied to the adoption of Huawei's 5G network equipment. The Brazilian government had shown a positive inclination towards the Trump administration's request to ban Huawei equipment. However, as COVID-19 spread rapidly, China used vaccine supply as a bargaining chip to ensure the Brazilian government's adoption of Huawei equipment (Evans 2021). In February 2021, when the number of COVID-19 deaths in Brazil reached its peak, the Brazilian Minister of Communications visited Beijing and met with Huawei executives. It is reported that the Brazilian Minister of Communications requested vaccine supplies during this meeting. Subsequently, the Brazilian government reversed its decision from several months prior to ban Huawei's participation, announcing new regulations allowing Huawei to participate in the 5G auction (Londoño and Casado 2021).

(2) Regional Strategy: Leveraging the Belt and Road Initiative and the ‘China+α’ Mechanism

In the early stages of the COVID-19 outbreak, China focused on bilateral aid and cooperation, but it gradually shifted its focus to regional or multilateral cooperation. During this process, the Belt and Road Initiative (BRI) was reconstructed as a key mechanism for COVID-19 related cooperation. Health issues, which were peripheral in the BRI, emerged as a core program following the spread of COVID-19. In particular, the Chinese government sought to link vaccine diplomacy with the promotion of global connectivity and the concept of a community of shared future for mankind (人类命运共同体). To effectively advance the BRI, the Chinese government utilized various cooperation mechanisms. By linking COVID-19 response cooperation with the BRI, the Chinese government could expect to expand its influence among BRI participating countries in the medium to long term. [Figure 6] illustrates China's strategic linkage of vaccine distribution with regional cooperation mechanisms.

[Figure 6] China's Vaccine Distribution and Regional Cooperation Mechanisms

Source: Rudolf (2021).

The Chinese government linked vaccine cooperation with the BRI. This is exemplified by the launch of the Initiative for Belt and Road Partnership on COVID-19 Vaccines Cooperation targeting BRI participating countries. This initiative, which involved over 20 countries participating in the Belt and Road Asia-Pacific High-Level Conference held in June 2021, agreed to enhance communication among vaccine regulatory authorities, urge vaccine-producing countries to increase production, expand vaccine supply to developing countries, promote joint vaccine research and development, foster partnerships for joint vaccine production, secure financial support from regional and multilateral development banks, and strengthen BRI cooperation to ensure vaccine distribution (Ministry of Foreign Affairs 2021a).

The Chinese government considered strengthening post-COVID-19 economic cooperation, including debt relief, digital economy investment, and expansion of renewable energy, in exchange for promising priority vaccine supply to partner governments. Examples of China linking vaccine diplomacy with other issues include its promise to provide financial aid or funds for vaccine purchases to Southeast Asian and South American countries, and discussions in July 2020 with Arab League countries to strengthen bilateral cooperation within the BRI framework based on vaccine cooperation. In this process, the Chinese government strategically utilized the ‘China+α’ framework. By implementing various levels of cooperation centered around China targeting countries in Southeast Asia, Africa, Central and Eastern Europe, and the Middle East, it established the ‘China+α’ mechanism. The Association of Southeast Asian Nations (ASEAN), the Forum on China-Africa Cooperation (FOCAC), Cooperation between China and Central and Eastern European Countries (China-CEEC Cooperation), and the Arab League are among the cooperation mechanisms China has utilized to promote the Health Silk Road at the regional level. China employs these regional cooperation mechanisms in various ways to advance the Health Silk Road. In the case of China-CEEC Cooperation, initiatives such as the ‘17+1 Hospital Alliance,’ ‘17+1 Public Health Cooperation Network,’ ‘17+1 Health Personnel Cooperation Network,’ ‘17+1 Health Policy Research Network,’ and the ‘17+1 Pharmaceutical Approval Cooperation Forum’ are being pursued (Rudolf 2021).[2] The Chinese government's comprehensive vaccine diplomacy, extending beyond mask diplomacy, and its organic linkage of bilateral and regional cooperation, can be interpreted as an attempt to build an image of a "responsible major power." In May 2020, during the spread of COVID-19, President Xi Jinping stated in a WHO speech in Geneva that China would supply vaccines, a global public good, at affordable prices and would provide $2 billion to the WHO to combat COVID-19.

COVID-19 served as an opportunity for China to expand its sphere of influence based on the Belt and Road Initiative. Among the countries participating in 17+1, 11 are EU member states, and 4 are EU candidate countries. The 17+1 initiative has served as a stepping stone for China to expand its influence beyond Asia and Africa into Europe. COVID-19 has acted as a catalyst for this expansion of Chinese influence (Kavalski 2019). This is why the EU, which aims for a unified Europe, expressed strong reservations when China launched the 17+1 initiative. China's growing influence over European countries has contributed to the EU's designation of China as a "systemic rival" (European Commission 2019).

V. Conclusion

During the global spread of COVID-19, the United States and China intensified their competition not only at the bilateral level but also at the regional level. In this process, the regional strategies of the US and China transitioned from conceptualization to issue-specific strategies. Throughout the COVID-19 pandemic, the US and China moved away from their initial contrasting approaches in vaccine development, production, and distribution towards pursuing vaccine cooperation. In the early stages of the COVID-19 outbreak, the US adopted a passive stance on vaccine cooperation due to situational factors, such as the need to respond to the rapid domestic spread, and the "America First" policy of the Trump administration, which undermined multilateral cooperation. Meanwhile, China, learning from the failures of its mask diplomacy in the early stages of COVID-19, strategically implemented vaccine diplomacy. While mask diplomacy included European countries experiencing rapid increases in COVID-19 cases, vaccine diplomacy was strictly focused on developing and non-Western countries.

The contrasting approaches of the US and China created a dynamic of "Chinese offense, American defense." China actively pursued vaccine diplomacy by integrating vaccine development, production, and distribution, while professing its contribution to providing global public goods. In response, the US maintained a passive approach, issuing warnings and criticisms regarding the risks of Chinese vaccines and the strategic intentions of the Chinese government. However, with the inauguration of the Biden administration, the US-China vaccine cooperation strategy entered a new phase. This is because the Biden administration declared strengthened vaccine cooperation within the Quad framework and took unprecedented steps, such as temporarily suspending vaccine intellectual property rights for developing countries, thereby creating a new turning point for vaccine cooperation. A new phase of US-China vaccine cooperation competition has unfolded.

The competition for cooperation in responding to COVID-19 between the US and China is ongoing. At this stage, it is premature to discuss the outcomes of US-China competition, particularly at the regional level. Sinovac and Sinopharm have not broadly disclosed their experimental data, and this lack of transparency tends to lead to distrust in Chinese vaccines, and by extension, the Chinese government. Nevertheless, demand for Chinese vaccines continues in developing countries lacking sufficient capacity to respond to the surge in COVID-19 cases. However, given the unproven stability of Chinese vaccines in the medium to long term, the sustainability of China's vaccine diplomacy, pursued as part of its foreign relations, may be difficult to secure. While supply chain bottlenecks currently hinder smooth distribution, it remains uncertain whether demand for Chinese vaccines will persist once Western vaccine manufacturers normalize production and can adequately supply developing countries.■

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[1] worldometer https://www.worldometers.info/coronavirus/#countries.
[2] China-CEEC Cooperation is an initiative promoted by the Chinese Ministry of Foreign Affairs to expand business and investment cooperation between China and Central and Eastern European countries, known as '17+1'. The Ministry of Foreign Affairs of China serves as the secretariat, and Central and Eastern European countries participate as National Coordinators. China-CEEC includes Albania, Bosnia and Herzegovina, Bulgaria, Croatia, Czech Republic, Estonia, Hungary, Latvia, North Macedonia, Montenegro, Poland, Romania, Serbia, Slovakia, and Slovenia. Cooperation between China and Central and Eastern European Countries http://www.china-ceec.org/eng/zdogjxty_1/.


■ Author: Lee Seung-joo_ Director of the EAI Trade, Technology, and Transformation Center • Professor of Political Science and International Relations at Chung-Ang University. He received his Ph.D. in Political Science from the University of California, Berkeley. His main research areas include international political economy, the international politics of trade, and global digital governance. His major works and edited volumes include “US-China Competition and Global Digital Governance” (edited by Lee Seung-joo), “International Political Economy of Cyberspace” (edited by Lee Seung-joo), “Institutional Balancing and the Politics of Mega FTAs in East Asia,” “Northeast Asia: Ripe for Integration?” (co-edited), and “Trade Policy in the Asia-Pacific: The Role of Ideas, Interests, and Domestic Institutions” (co-edited).



■ Contact and Editing: Yoon Ha-eun_ EAI Research Fellow

Inquiries: 02 2277 1683 (ext. 208) | hyoon@eai.or.kr