US-China collaboration in biotechnology is likely to gain momentum as the United States appears to be easing plans for stringent restrictions on such partnerships, industry analysts say. This shift comes amid Beijing’s aggressive efforts to develop its healthcare sector under a recently unveiled five-year strategic plan.
Analysts from Nomura and Macquarie noted that cross-border licensing agreements and investments in biotech between American and Chinese companies could see significant growth if Washington adopts a more flexible regulatory stance. Jialin Zhang, Nomura’s head of China healthcare research, described the potential uptick in out-licensing deals as riding “on a high tide” amid favorable conditions.
The US Department of the Treasury has been drafting investment guidelines aimed at balancing national security concerns with the desire to maintain collaboration in pharmaceutical innovation. According to unnamed sources cited by Reuters, the proposed regulations would largely allow American pharmaceutical companies to license most Chinese biotech products, except those related to pathogens or weaponizable biotechnology.
This approach represents a departure from earlier expectations based on legislative proposals introduced earlier this year. In particular, the Biotech Investment National Security Act (Binsa), introduced in June by Representatives John Moolenaar and Debbie Dingell, seeks to impose Treasury review on US pharmaceutical licensing, joint ventures, and equity investments in Chinese biotech firms. The lawmakers argue such measures are necessary to prevent Chinese companies from gaining excessive control over the US economy. However, the bill has not yet been passed.
Industry stakeholders have expressed strong opposition to broad restrictions in this area. Macquarie analysts highlighted that a blanket ban on biotech deals with China would undermine efforts to improve global health outcomes and disrupt the business models of major pharmaceutical firms. They reported that the global pharmaceutical companies they consulted unanimously opposed the idea of such a prohibition.
The ongoing debate occurs amid a broader context of competition in advanced technologies, including artificial intelligence (AI) and semiconductors. Bank of America noted that Taiwan and the US are both viewed by fund managers as prime beneficiaries of the next AI investment cycle, with Taiwan gaining from its role in advanced chip production and packaging, and the US benefiting from other segments of the AI ecosystem. South Korea and Japan also stand to gain, through memory technology and industrial automation, respectively. China meanwhile continues to play a vital role as a key supplier in the global AI supply chain while simultaneously investing heavily in its own infrastructure buildout.
Analysts describe this dynamic as forming a “smile curve,” with semiconductor manufacturing and AI model development at one end and robotics and industrial applications facing more competitive commercialization challenges at the other. This multifaceted role underscores the complexity of balancing economic interests with national security considerations as US-China relations navigate evolving terrain in biotechnology and high technology sectors.