Recently, the U.S. restrictions on the Chinese biotechnology sector have shifted from “expectation” to “actual action”. On September 12, 2025, the U.S. Department of Commerce’s Bureau of Industry and Security (BIS) placed 23 Chinese entities on the “Entity List”, including three biotechnology companies: Beijing Tianyi Huiyuan Biotechnology Co., Ltd., Beijing Qinke Biotechnology Co., Ltd., and Shenggong Bioengineering (Shanghai) Co., Ltd.. Once listed, these companies will face a “presumption of denial” licensing review policy when obtaining items subject to the U.S. Export Administration Regulations (EAR) (including technology, equipment, software, etc.), meaning they will almost be unable to acquire U.S.-sourced goods and technologies through normal trade channels.
Additionally, on September 10, The New York Times reported that the Trump administration is discussing a draft executive order to impose further restrictions on Chinese pharmaceutical companies, including:
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Requiring that transactions involving U.S. companies purchasing Chinese experimental drugs undergo a “mandatory review” by the Committee on Foreign Investment in the United States (CFIUS);
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Implementing stricter reviews of Chinese clinical trial data and imposing higher regulatory fees;
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Requiring pharmaceutical companies to increase domestic production of critical drugs such as antibiotics and analgesics.
Although a White House spokesperson stated that the draft is not currently being “actively considered”, it reflects the U.S. intention to be vigilant and suppress the rise of Chinese biotechnology.
This trend is not surprising. In recent years, China’s innovative drug R&D capabilities have significantly strengthened, and its share in global biopharmaceutical transactions has continued to rise. The traditional U.S. industrial ecosystem, which relies on small enterprise innovation and large pharmaceutical company acquisitions, is being challenged by Chinese companies—who, with their R&D efficiency and cost advantages, are increasingly favored partners for multinational pharmaceutical companies. The U.S. move aims to maintain its industrial competitiveness and technological leadership.Nevertheless, analysts generally believe that the likelihood of the U.S. completely banning new Chinese drugs from entering the U.S. market is low. Innovative drugs like Zebutini, which have significantly improved patient quality of life, have a tangible clinical demand in the U.S., and exclusion would face strong opposition from the medical community and patient groups.
01 U.S. Strategy: Balancing Containment and Cooperation
It is noteworthy that in the biotechnology sector, U.S. multinational pharmaceutical companies are actually the main beneficiaries of cooperation with China. The uniqueness of this industry lies in the fact that the U.S. holds a leading position in the global innovation chain while also being the largest buyer market for drugs. At this stage, Chinese innovative drugs do not pose a substantial threat to the U.S., so the U.S. tends to adopt limited restrictions rather than completely severing cooperation.
Essentially, U.S. policy-making is deeply influenced by capital and industry interests. The healthcare industry is highly profitable and has strong lobbying power; if restrictive policies significantly harm the interests of large pharmaceutical companies, making it difficult for them to access high-quality R&D results and product lines from China, such measures are likely to be difficult to implement. Even if the U.S. shows a tough stance, it can be viewed more as a negotiation strategy and political statement.
It should also be noted that there is a significant asymmetry in the structure of the U.S.-China pharmaceutical markets: the Chinese market is growing rapidly and has enormous potential, while the U.S. market still contributes the highest drug prices and profits globally. If China takes reciprocal countermeasures—such as delaying the review of new U.S. drugs, raising market access thresholds, or adjusting medical insurance payment policies, the losses suffered by U.S. companies may far exceed the benefits gained from so-called “industrial protection”.
Therefore, even if the U.S. continues to exert pressure, its measures are expected to focus on “precise strikes”, such as restrictions on specific technology areas or companies, rather than a large-scale termination of R&D and commercial cooperation with Chinese companies. Fundamentally, the global pharmaceutical industry is highly dependent on cross-border collaboration, and maintaining commercial interests remains an important consideration for U.S. policy.
02 Challenges and Opportunities for Chinese Pharmaceutical Companies
In the short term, adjustments in U.S. policy will bring many challenges to Chinese pharmaceutical companies. R&D and production processes that rely on U.S. equipment, reagents, and technology may be hindered; early-stage R&D collaborations and licensing transactions will face stricter reviews, increasing compliance costs and time investments; the pathways for fast-follow drugs to enter international markets will become more difficult, and their international market value may decline.
However, in the long run, the Chinese biotechnology industry still possesses significant resilience. Truly globally innovative BIC/FIC drugs can still enter international markets, albeit with higher clinical investment; the vast domestic market demand and continuously optimized review and medical insurance policies provide a solid foundation for innovative drug companies.
Moreover, an increasing number of companies are actively expanding into alternative markets in Europe and Asia-Pacific to reduce dependence on the U.S. market. Data shows that by 2025, the proportion of Chinese innovative drug licensing transactions in Europe has exceeded 70%, demonstrating the ability of Chinese pharmaceutical companies to achieve market diversification.
03 China’s Response Strategy: Independent Innovation and Market Diversification
In response to changes in the external environment, China is forming a systematic response strategy at both the government and enterprise levels. In terms of policy, the country continues to increase support for innovative drugs in medical insurance, exploring long-term mechanisms such as supplementing medical insurance funds through state-owned capital returns, while encouraging supply chain independence through industrial policies.
Enterprises are accelerating their transformation towards original innovation, focusing on developing globally breakthrough new targets and drug forms, and collaborating with domestic upstream instrument and reagent companies to promote the domestic substitution of key technologies. In terms of market strategy, on one hand, they stabilize international partnerships through methods such as “exchanging market for cooperation”; on the other hand, they actively expand into the “Belt and Road” and European markets, building a more diversified international cooperation network.
04 Future Outlook: Normalization of Competition, Innovation is Key
Overall, U.S. technological restrictions and market access barriers will pose phase challenges to the Chinese biotechnology industry, but will not change its long-term positive development trend. Domestic market demand, policy support, and talent reserves together form a solid foundation for the industry.
For investors, they should focus on those companies that truly possess original innovation capabilities, have strong domestic market commercialization abilities, and have established a global perspective. For small biotech companies, a more cautious assessment of their technological differentiation and clinical development capabilities is necessary.
Competition and cooperation between China and the U.S. in the biotechnology field will coexist for a long time. “Decoupling” does not align with the interests of both parties and is not conducive to global patients accessing innovative treatment methods. The future landscape is more likely to present a situation of “cooperation within competition and competition within cooperation”, while China continues to enhance its strength and international voice in this process.