What does the US get wrong about Chinese biotechnology?
The US will struggle to win the biotech race with its current assessment of China’s biotech capabilities.
Key Points
The US is so focused on genomics/API/contract research that it is missing broader Chinese innovation gains, and significant progress in China’s industrial bio.
The US has not appropriately understood the priority level in China. Biotech is now one of THE tech priorities in Beijing, not just A priority.
Many of China’s biotech tools are still underpinned by US tech and IP. This will be a future battleground.
Article
Earlier this year, the National Security Commission on Emerging Biotechnology (NSCEB) published an in-depth report “Charting the Future of Biotechnology.” This was a hugely influential report. It was widely read in biotechnology communities globally. People from all over the world shared it with me to push their own point. That is a sure fire sign of influence.
In my experience, the points raised in the NSCEB report are similar to mainstream views held by the broader US policymaking circle. So I will use it as a crude proxy for US views on biotech (acknowledging the US is a big place with a diversity of views).
The report was mostly an action plan for the US to lead in biotechnology. Underwriting the report - and the broader existence of the NSCEB - is that the US needs to be far more proactive to maintain its lead over China in biotech. Thus, it offered some brief assessments on China’s biotech ecosystem.
None of the analysis was wrong specifically (despite my click bait title), but it paints an incomplete picture of China’s efforts.
This does matter. US assessments are so pharma/API/genomics-centric that miss how far China is now pushing industrial and agricultural bio. I would suggest the US focus is on current vulnerabilities, not future trends. In the end, industrial bio is the holy grail. Pharma is a stepping stone. And there is underappreciation of how high a priority biotech is in Beijing.
A table comparing the main NSCEB assessments on China with my own (There are some extended details below the table)
Let’s work through some of these points in detail.
A mischaracterisation of high biotech now is in Beijing’s strategic calculus.
Over the past two years, China has significantly elevated broader biotech and particularly industrial biomanufacturing in its hierarchy of technological priorities. It is now reasonable to conclude that the Chinese government views biomanufacturing—alongside embedded AI—as the most critical industrial transformation of the next 15 years.
China’s most recent government work report listed ONLY four technologies to increase funding in 2025: “biomanufacturing, quantum technology, embedded AI, and 6G technology” (translation of the document here, see pg 18). Biotechnology was listed first. That is intentional. China also has a standalone five year plan for the bioeconomy with the goal of being a global leader by 2035.
The NSCEB report (and general commentary in the US) mentions that Biotech has been designated as a Strategic and Emerging Industry (SEI) for nearly two decades and it had goals in Made in China 2025 etc. But there are dozens of technologies designated as strategic in China. There is only one listed first in the Government Work report. There are very few technologies with standalone FYPs accompanying the central document.
This mischaracterisation (or at least underemphasis) matters. When technologists or general policy people hear a certain technology is a strategic industry in China, their ears turn off. They have heard it a million times - we all have. A far more important question is what number priority is it. I would suggest in the top 2 or 3.
A narrow focus on APIs, genomics firms and pharma obscures bigger challenges ahead.
The NSCEB report, like many assessments of US-reliance on China’s biotech, focuses on three vulnerabilities: a) Big genomics firms like BGI’s super cheap sequencing capabilities (with undeclared state support) that are undercutting US firms competitiveness b) the dominance of Chinese firms in doing contract research and manufacturing with a particular focus on Wuxi AppTec and Wuxi Biologics c) The reliance of the US on cheap active Chinese pharmaceutical ingredients (API).
These are all serious immediate vulnerabilities so I understand the attention. But if the US solved these three issues overnight, it would stop potential disruption, it would NOT help the US lead the biotech race. What is more important for that goal is:
a) which company develops the best microorganism strains that produce bio-based goods at a cheaper price;
b) which companies solve the scale up challenges;
c) which country can organise a consistent cheap supply of biomass (obviously it depends if the final solution is modular or centralised);
d) which companies/countries produce the fundamental tools and breakthroughs that allow the above. These can be biological design tools, new organism editing breakthroughs, better ways to utilise data, biomass processing technology, new DNA synthesis technology among others. I accept that BGI and MGI have a role to play. But many of the new breakthroughs are coming from smaller companies that may only be on the radar of a few officials in their local province. If we only focus on a handful of big genomics firms, we will miss a lot.
A few company types that I would track are: collaborations between strain development companies like Angel Yeast and commercial chemical producers such as PHA builder; Companies building fundamental tools like Huida Gene; Companies that are already building commercial scale 2nd gen bio-based chemical production.
No mention of China’s position in feedstock competition
A biotech revolution requires cheap, easily accessible biomass that does not interfere with food production. At the moment, the main feedstocks for biofuels and bio-based chemical production are sugar, starch or corn (the food part of the corn) which directly interferes with food security. So, the race is on to utilise “2nd gen” feedstocks such agricultural offcuts, algae, biomass-specific crops that are grown on marginal land or as cover crop, municipal waste or some combination of those.
As such, feedstocks are a key pillar of the NSCEB policy recommendations. It explains that the US has potentially a wide variety of 2nd gen feedstocks that could be harnessed and the US should spend more on developing them.
The NSCEB has no assessment of China’s position on feedstocks, despite the utter centrality to the race.
Because China is a net food importer, it is assumed to have a less advantageous position. But, it is also an advantage. It potentially forces producers in China to look for non-food feedstock. Whereas the abundance of US corn has made it hard to force change in the US.
There has been a big shift in Chinese policy and company in the last three years to the point where they may be ahead of the US.
A renewed policy focus on saccharification of biomass - turning woody or the non-food part of biomass into sugar to be used in industrial fermentation. This avoids competing with traditional sugar production.
Numerous companies (with govt support) opening commercial scale plants to produce chemicals with 2nd-gen feedstocks now. In the past the focus had been on fuels and energy from biomass.
A policy focus on new microorganism strains that can consume a wider variety of feedstocks (not just sugar).
This does matter. If China can create a cheaper way to do saccharification or can find ways to commercially produce chemicals from 2nd gen feedstocks, it will be a huge leg up and pretty attractive to chemical manufacturers around the world.
4. A ramp up in synthetic biology and the science of biomanufacturing
Outside of China, the biomanufacturing focus has somewhat shifted to commercialisation or scale up in industrial biotechnology and agri-biotechnology. Strain/chassis/organism design is seen somewhat as a service (almost a commodity even). China has been heading in the opposite direction. It’s not the bioparks (which are everywhere), but rather industrial scale science labs that automate huge volumes of experiments. Large scale automated labs have been a fact of life in China for some time. But the number working on SynBio has grown with the increased prioritisation - even if quite a few labs are just rebranding their work.
5. There is a battle over the basic tools.
Much of the Chinese biotech system is still underpinned by US technology. There are two components to this. One, Beijing is trying to find alternatives for well-established technologies in which the US leads - like gene editing and biological design tools. This is an attempt to make these tools into simple commodities (a wide number of suppliers with similar offerings) to dull US advantage. Two, numerous technologies are emerging such as biomanufacturing platforms, advanced processing of biomass, new downstream processing technology, the application of AI to biology. The US has existing companies that are still commercially early on. It is important that the US developers of this tech can find a way to survive through these valleys of death, because their Chinese competitors will get support.
The five areas above are hugely consequential as Beijing now views the forthcoming bio-industrial revolution as central to its future strategic lead. Almost every global supply chain from chemicals to advanced materials to semiconductors to life saving medicine will have new biological manufacturing as part of its production over the next two decades. If China succeeds, it will create a huge new set of dependencies for US supply chains.