In the news: U.S. Secretary of State visits Beijing, the CFDA proposes to speed up drug market access, and Wanda and IBM establish a cloud JV

The China Food and Drug Administration (CFDA) has said it is considering taking measures that will shorten the time to market for approved imported drugs in an effort to ease a shortage of innovative medicines. In a statement published on March 17, the CFDA proposed the elimination of a requirement asking applicants who intend to conduct an international multi-center clinical trial in China for drugs apart from vaccines to obtain prior foreign approval, or be currently in phase II or III of overseas clinical trials. The document said that imported drugs would be allowed to directly apply for market authorization once completing international multi-center clinical trials. Imported drugs face three to four years of reviews on average before being allowed into the Chinese market, compared with about 10 months in the U.S., Chinese newspaper The Paper reported. International pharmaceutical companies seeking to introduce a product to China usually go through the imported drug route, of which the very long CFDA approval process has been criticized for stifling innovation and limiting the entry of new (and much needed) medicines. The CFDA generally requires drug makers to start from scratch—even if they have all the data from overseas trials and the product is already on shelves in foreign markets—by conducting all four phases of clinical trials. This move to quicken market access by allowing drug makers to apply directly in earlier stages of overseas exercises will potentially lead to an increase in R&D activity in the country, and also follows February guidelines released by the State Council aimed at simplifying the drug distribution network as a broader measure of healthcare reform.

Wanda and IBM establish cloud JV

IBM and Wanda Internet Technology Group have formed a new joint venture (JV), Wanda Cloud Company, to bring more public cloud services to China. Chinese companies will have access to IBM cloud infrastructure and its artificial intelligence platform Watson, as well as technologies such as blockchain and internet of things. The JV will go live next year and help distribute, build and operate the IBM cloud platform in China using Wanda-owned data centers. This marks the first time that IBM has introduced its business AI platform Watson to China, and follows the company's earlier foray into the country with its partnership with 21Vianet announced two years ago. China is a challenging market for foreign cloud service providers, which must enter through partnerships with Chinese companies holding value-added telecom business permits. The Ministry of Industry and Information Technology (MIIT) released a draft circular aimed specifically at the cloud market in November, defining the business as internet resources collaborative services, a subset of internet data center (IDC) services listed in the Telecom Catalogue, and reiterating the foreign participation limits. IBM was reportedly the first major Western tech company to provide the PRC government with its source code.

CCTV's consumer rights show targets Nike, Muji

China's annual consumer protection show on state-run television that aims to uncover abuses by companies has criticized companies including Nike Inc. and Japan's Ryohin Keikaku Co. and Calbee Inc. The “name-and-shame” program, which aired on the evening of March 15, said that Ryohin Keikaku, operator of the Muji chain, had sold certain products with labeling that concealed their origin as being from areas of Japan from which imports to China are banned on concern of possible radiation contamination. A Ryohin Kekaku spokesman said that the company does not sell products containing ingredients from parts of Japan on the China import-ban list. Calbee was accused of providing breakfast cereal in China sourced from import-banned areas of Japan as well. The company said it does not directly export the cereal to China. CCTV also targeted Nike for selling 300 pairs of basketball shoes that didn't include the advertised Zoom Air sole cushions. The sportswear maker said that consumers were contacted and offered compensation and an apology. The annual broadcast, which coincides with World Consumer Rights Day, does indeed lead to results, with observers saying that foreign companies in China need to be extra careful. It has previously targeted some of the biggest global brands including Apple Inc., McDonald's Corp. and Volkswagen AG—Apple's Tim Cook apologized in 2013 and McDonald's retrained workers in 2012. And this year, right after the program, Alibaba Group Holding Ltd. released a post saying that it has been tracking and blocking abnormal Japanese nuclear-contaminated products since 2011, deleting and taking actions against thousands of links and businesses this year.

Rex Tillerson meets President Xi, FM Wang Yi in Beijing

U.S. Secretary of State Rex Tillerson appeared to strike a cordial tone during his visit to Beijing—the highest-level face-to-face meeting between the U.S. and China since President Donald Trump took office. He said that the United States is looking forward to the first meeting between the two presidents, and that Trump places a “very high value” on communications with President Xi Jinping. The two sides made no mention of contentious issues such as possible punitive trade measures against China and Washington's unhappiness with Beijing's actions in the South China Sea. Tillerson's PRC trip followed remarks he made in South Korea two days earlier, that pre-emptive military action against North Korea may be necessary if the threat from its weapons program reaches a level that requires action. Any signs of progress in U.S.-China relations will be a major boost to market sentiment. Tillerson's visit—and avoidance of the anti-China rhetoric of the Trump election campaign—suggests that world panic may actually be avoided. If the friendly approach were abandoned and Trump's threats of punitive tariffs in China are realized, the retaliatory measures and global fallout would scars investors and consumers alike. Now let's look ahead to a Trump-Xi summit.

CFDA draft proposals to quicken drug market access

The China Food and Drug Administration (CFDA) has said it is considering taking measures that will shorten the time to market for approved imported drugs in an effort to ease a shortage of innovative medicines. In a statement published on March 17, the CFDA proposed the elimination of a requirement asking applicants who intend to conduct an international multi-center clinical trial in China for drugs apart from vaccines to obtain prior foreign approval, or be currently in phase II or III of overseas clinical trials. The document said that imported drugs would be allowed to directly apply for market authorization once completing international multi-center clinical trials. Imported drugs face three to four years of reviews on average before being allowed into the Chinese market, compared with about 10 months in the U.S., Chinese newspaper The Paper reported. International pharmaceutical companies seeking to introduce a product to China usually go through the imported drug route, of which the very long CFDA approval process has been criticized for stifling innovation and limiting the entry of new (and much needed) medicines. The CFDA generally requires drug makers to start from scratch—even if they have all the data from overseas trials and the product is already on shelves in foreign markets—by conducting all four phases of clinical trials. This move to quicken market access by allowing drug makers to apply directly in earlier stages of overseas exercises will potentially lead to an increase in R&D activity in the country, and also follows February guidelines released by the State Council aimed at simplifying the drug distribution network as a broader measure of healthcare reform.

Wanda and IBM establish cloud JV

IBM and Wanda Internet Technology Group have formed a new joint venture (JV), Wanda Cloud Company, to bring more public cloud services to China. Chinese companies will have access to IBM cloud infrastructure and its artificial intelligence platform Watson, as well as technologies such as blockchain and internet of things. The JV will go live next year and help distribute, build and operate the IBM cloud platform in China using Wanda-owned data centers. This marks the first time that IBM has introduced its business AI platform Watson to China, and follows the company's earlier foray into the country with its partnership with 21Vianet announced two years ago. China is a challenging market for foreign cloud service providers, which must enter through partnerships with Chinese companies holding value-added telecom business permits. The Ministry of Industry and Information Technology (MIIT) released a draft circular aimed specifically at the cloud market in November, defining the business as internet resources collaborative services, a subset of internet data center (IDC) services listed in the Telecom Catalogue, and reiterating the foreign participation limits. IBM was reportedly the first major Western tech company to provide the PRC government with its source code.

CCTV's consumer rights show targets Nike, Muji

China's annual consumer protection show on state-run television that aims to uncover abuses by companies has criticized companies including Nike Inc. and Japan's Ryohin Keikaku Co. and Calbee Inc. The “name-and-shame” program, which aired on the evening of March 15, said that Ryohin Keikaku, operator of the Muji chain, had sold certain products with labeling that concealed their origin as being from areas of Japan from which imports to China are banned on concern of possible radiation contamination. A Ryohin Kekaku spokesman said that the company does not sell products containing ingredients from parts of Japan on the China import-ban list. Calbee was accused of providing breakfast cereal in China sourced from import-banned areas of Japan as well. The company said it does not directly export the cereal to China. CCTV also targeted Nike for selling 300 pairs of basketball shoes that didn't include the advertised Zoom Air sole cushions. The sportswear maker said that consumers were contacted and offered compensation and an apology. The annual broadcast, which coincides with World Consumer Rights Day, does indeed lead to results, with observers saying that foreign companies in China need to be extra careful. It has previously targeted some of the biggest global brands including Apple Inc., McDonald's Corp. and Volkswagen AG—Apple's Tim Cook apologized in 2013 and McDonald's retrained workers in 2012. And this year, right after the program, Alibaba Group Holding Ltd. released a post saying that it has been tracking and blocking abnormal Japanese nuclear-contaminated products since 2011, deleting and taking actions against thousands of links and businesses this year.

In the news: U.S. Secretary of State visits Beijing, the CFDA proposes to speed up drug market access, and Wanda and IBM establish a cloud JV

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