US bill paints some Chinese biotechs as security threats

US legislation

Legislation tabled in the US is seeking to block Chinese life sciences companies from claiming federal funding and contracts on the grounds they are a national security concern.

The draft BIOSECURE act has been drawn up by the bipartisan House Select Committee on the Strategic Competition between the US and the Chinese Communist Party (CCP) and, if enacted, would restrict US executive agencies from contracting with some biotechnology providers.

It singles out various Chinese biotechs, including genomics specialist BGI Group and its subsidiary companies MGI and Complete Genomics, as well as contract development and manufacturing organisation WuXi Apptec, describing them as “foreign adversary biotech companies.”

If it makes it onto the statute – and that is far from guaranteed – the legislation would restrict federally funded medical providers from using the companies’ products and services.

Shares in publicly-listed WuXio Bio - also mentioned in the bill in connection with a link between its chief executive and the Chinese military - have fallen sharply since news of the bill emerged, and failed to recover after the company issued a statement yesterday on the Hong Kong Stock Exchange to try to play down its potential implications. BGI Group, meanwhile, has also seen a steady decline in its stock over the last few days.

The development calls to mind the threatened ban in the US of social media app TikTok, which first emerged under the Trump administration in 2020. That has resulted in the use of the app being restricted on devices operated by state and federal government employees, although calls for the US arm of the company to be sold off to an American buyer have so far come to nothing.

Links to China's military cited

The wording of the BIOSECURE act claims that China is seeking to dominate biotechnology as an industry of the future and has been pursuing a strategy of ‘military-civil fusion’ to modernise the People’s Liberation Army (PLA).

“BGI […] collects genetic data of Americans and uses it for research with the Chinese military,” said committee chairman Mike Gallagher (R-WI) in a statement. “The CCP will undoubtedly use the genetic data collected by BGI to further its malign aggression, potentially even to develop a bioweapon used to target the American people,” he added.

The bill also says that WuXi Bio’s chief executive, Chris Chen, was previously an adjunct professor at the PLA’s Academy of Military Medical Sciences, although WuXi’s response says that status "was granted as a courtesy after a one-time guest lecture in 2013, a common practice in Chinese universities.”

The company insists that it is operating its business as normal and “is committed to supporting its customers globally and to operating with the highest standards of compliance and in accordance with the applicable laws and regulations of all jurisdictions where it has business operations.”