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China’s child vaccine scandal spells big trouble for president Xi

20 August 2018

5:04 PM

20 August 2018

5:04 PM

The word changsheng means ‘long life’. But Gao Junfang’s Changsheng Biotech has long been in the business of robbing its victims of just that. Since taking over the company in the nineties, Gao oversaw the privatisation of the state-owned big pharma and turned it into her personal dynasty. She secured majority shares and planted her husband, her children, and their partners into the meatiest roles in the company. For decades, Gao was the entrepreneurial poster child – from rags (sort of) to riches, a walking example of the possibilities of China’s economic growth, and an idol especially for women.

But last month, Gao was arrested along with 17 other people in the company. As of 2017, Changsheng had sold 250,000 dud DPT vaccines. In China, as in Britain, these jabs are used to immunise babies against diphtheria, whooping cough, and tetanus. Though the inferior three-in-one vaccines didn’t produce any adverse effects, their recipients were not actually immunised; all three diseases are potentially fatal. Needless to say, it was a recipe for disaster. The authorities imposed a fine and ordered Changsheng to stop productions.

But none of this was public knowledge until last month, when another vaccine scandal broke out. This time, a whistle-blower revealed that Changsheng had been falling into old habits and making dodgy rabies vaccines. It had been mixing expired vaccines into new mixtures, and fabricating production dates and batch numbers. As well as the moral depravity of Gao and her team, it’s clear that the government – at some level – turned a blind eye to the company’s malpractice.

In 2017, the company’s records show that sixty per cent of revenues were channelled into ‘sales expenditures’. Between 2016 and 2017, the company’s sales expenditures rose to six hundred million yuan – one category, so-called ‘Meeting Fees’, rose by more than 2000 per cent from 2016. By comparison, Changsheng funnelled less than eight per cent of its revenues into research and development that year (just a little over a hundred million yuan, or ten million pounds). To put that into perspective, its main competitors consistently put around half of their revenues into research and development. Where was Changsheng spending its money?

Then consider the oddities: over the years, the company has racked up twenty cases of corruption in the public records. A typical example – between 2014 and 2016, Changsheng bribed the local province’s deputy director for prevention of infectious diseases seven times – paying him almost 40,000 yuan. Even for the DPT transgression last year, the fine that was eventually imposed on the company was 3.4 million yuan – a measly 0.0003 per cent of the company’s annual turnover. A slap on the wrist has never been so symbolic. How has Changsheng been so lucky?

Now if I were a billionaire businesswoman, ‘meeting fees’ would certainly be my euphemism of choice for ‘phone a government friend’. There are also rumours that the corruption goes higher than local authorities. Some papers are reporting that Gao had the support of the ‘Jilin Gang’, which runs to the very heart of government. Formed out of the friendship between People’s Daily editor and former party secretary of Jilin, Gao Di, and the then-president Jiang Zemin, the Jilin Gang has been the breeding ground for promising politicians since the 1990s. With Gao Di’s leadership and president Jiang’s blessing, members of the faction could be assured of high office.

Gao Junfang maintained a close relationship with the Jilin Gang. As a leading businesswoman in Jilin, who also facilitated the privatisation of Changsheng, this was par for the course. On the walls of Changsheng’s grand lobby, hung pictures of Gao with president Jiang and Gao Di’s various protéges. Are these the powerful allies behind Gao Junfang’s decades-long success? As Ren Ruihong, a former Director at China Red Cross, says – it’s hard to see how else Changsheng could have survived 20 bribery cases as well as the 2017 DPT scandal.

But Changsheng has captured the Chinese imagination for more than just the backroom deals. Corruption has been a fact of Chinese public life for years, but this time it concerned the health and very lives of citizens. And the government wasn’t on their side.

Since discovery of DPT tampering, no effort had been made to notify the victims of the vaccines. Only as the rabies scandal blew up and the government got involved at the highest level, were the problem batch numbers of DPT released. Finally, parents could check if their babies had been injected with the duds.

Concerned parents have also been posting on social media and protesting at their local health clinics. But some had been detained by the police after arranging protests, whereas others now refuse to take their children in for substitute vaccines. One parent has had his child’s government compensation (from an earlier vaccine case, if you can believe it) stopped because he painted anti-vaccine messages on his house. ‘Vaccines’ was the most censored word on social media in the days after the news broke. These are acts of a government who see the citizens as ‘them’ rather than ‘us’. Officials are working as hard to control the damage on social media as they are to get to the bottom of this.

For concerned Chinese parents and others, the big question is: how can we trust the government? You might think that the people already distrust the government – after all, it is a dictatorship that, not so long ago, was shooting its own people. You would be right and wrong. The fact of the matter is that most really don’t care about living in a “one-party state”, so long as they’re getting their bread and milk. In the noughties, two baby formula scandals (involving fake milk powder) already weaned the Chinese off of Chinese-made milk. What the Changsheng case shows is that Chinese-made medicines can’t be trusted, either. But if the government can’t even provide the most basic of amenities and punish those who complain, then what’s the point of them? I’ve no doubt that some high up in Beijing central command have asked themselves the same.

This is a big hit to president’s Xi’s vision of China. A few years ago, he proudly announced the ‘Made in China 2025’ strategy, which would see China leave the plastic toy days of old and join the West in producing quality goods, like drugs and computers. But Changsheng shows that – no matter how fast your growth or how impressive your science, if the political structure is vulnerable to corruption, there is only so far you can go. Chinese leaders need to answer the age-old question of sovereignty – how can the government solve problems within itself, short of anyone checking its power? There might be a way without checks and balances, but locking up pained parents who protest is step in the wrong direction.


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