President Biden signed Monday, September 12, an executive order to boost U.S. domestic biotechnology and biomanufacturing and reduce dependence on China.
It will allow the U.S. to secure its dominance in biotechnology, covering many areas in the sector, from producing new products and materials to biofuels and food.
The executive order also outlines that the U.S. will “train and support a diverse, skilled workforce and a next generation of leaders from diverse groups to advance biotechnology and biomanufacturing.”
In July, the Washington Post cited a report by the Center for a New American Security, warning of the dangers for the U.S. of falling behind China in biotechnology.
According to Fortune, U.S. firms held more than 40% of biotechnology’s global market share in 2021. But, according to a recent report by consulting firm Nova One Advisor, China is expected to enjoy much growth in biotech in the next decade as the country has made big investments in biotech R&D.
A Beijing-based firm, Daxue Consulting, in 2021, forecast China’s pharmaceutical industry will overtake that of the U.S. to become the largest in the world within a decade.
According to McKinsey’s report earlier this year, the Chinese government proposed a new five-year plan for the biotechnology sector. The regime vowed to increase the industry’s value to 22 trillion yuan (around $3.2 trillion) over the next couple of years.
Chinese biopharmaceutical stocks dropped sharply on Tuesday, September 13, after the news.
Shares of Wuxi Biologics, a contracted drug maker that North America market accounts for half of its sales, plummeted 20% in Hong Kong on Tuesday.
A fund manager at Shanghai-based Huichen Asset Management, Dai Ming, told the South China Morning Post, “China will probably lose some of its CRO [contract research organization] market share, given most of the industry companies have about half of their revenue coming from overseas.”
He noted, “That is also a sign of an all-out confrontation between China and the U.S.”