Enforcement Upon Presidential Signature After Senate Passage
Bloomberg: "Bipartisan Support, 70% Chance of Enactment"
The U.S. House of Representatives has passed a bill sanctioning Chinese biotech companies. The reason given is that they pose a threat to U.S. national security, but some analysts believe that the U.S. is trying to curb Chinese biotech technology amid escalating tensions between the U.S. and China over future industries.
According to Bloomberg on the 9th (local time), the U.S. House of Representatives passed the Biosecure Act late that afternoon with 306 votes in favor and 81 against, designating China's leading biotech companies as security threats and imposing sanctions.
This bill will take effect after it passes the U.S. Senate and is signed by the President. Bloomberg Intelligence estimates a 70% chance of the bill becoming law, as it has received bipartisan support in both the House and Senate.
The Biosecure Act aims to list Chinese biotech companies that raise U.S. national security concerns on a sanctions list and prohibit federal agencies from transacting with these companies. The U.S. Congress targeted five biotech companies: BGI Group, China's largest genetic analysis firm; Wuxi Biologics, a contract development and manufacturing organization (CDMO) for biopharmaceuticals; Wuxi AppTec, a contract research organization; and BGI's subsidiaries MGI and Complete Genomics. The bill also prohibits other companies using equipment or services from these sanctioned firms from transacting with federal agencies.
The legislative background of the bill stems from concerns that Chinese biotech companies could transfer sensitive U.S. bio and genetic information to the Chinese Communist Party. Brad Wenstrup (Ohio), a Republican congressman and a key supporter of the bill, argued that "the companies named in the regulation are linked to the Chinese Communist Party, putting the data of millions of Americans at potential risk."
This bill is expected to have a significant impact on the global pharmaceutical industry, as Chinese biotech companies account for a large portion of the active pharmaceutical ingredients in the global drug supply chain. Some view this legislation as part of the ongoing hegemonic competition over future food and technology, with the U.S. aiming to check China.
The companies included in the sanctions list have protested, claiming the bill is based on false allegations and undermines fair competition. The stock prices of the Chinese biotech companies on the sanctions list have trended downward this year amid U.S. sanction moves.
Numerous bills targeting China are scheduled for votes in the U.S. Congress this week. Bloomberg reported that bills targeting Chinese supply chains in industries such as electric vehicles are awaiting congressional approval. Following the passage of the Biosecure Act, House Speaker Mike Johnson stated in a release, "This will not stop here, and we are committed to further developing legislation related to China’s predatory practices."
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