US House passes bill to blacklist some China biotech firms

China hawks in the U.S. House overcame a last-ditch lobbying effort and passed legislation Monday night that would blacklist Chinese biotech companies and their U.S. subsidiaries.

The bill, approved by a vote of 306 to 81, now goes to the Senate.

At stake, the bill’s backers argued, is whether China will dominate another field the U.S. pioneered, amid fears China could engineer bioweapons or otherwise capitalize on biological data vacuumed up from the rest of the world.

The legislation, which passed the House Oversight Committee 40-1 in May, would affect five companies to start: BGI Group, BGI spinoffs MGI Tech and MGI’s US subsidiary Complete Genomics, WuXi AppTec, and WuXi Biologics.

The measure, dubbed the Biosecure Act, is the latest power flex by lawmakers who have already succeeded this year in requiring Chinese-based parent company Bytedance Ltd. to divest from TikTok or face a U.S. ban on the popular social media site.

Bloomberg Intelligence gives the biosecurity bill a 70% chance of becoming law given strong support in both the House and the Senate. Numerous other bills targeting China are set for votes this week, including legislation targeting the Chinese supply chains for electric vehicles as well as other industries.

The companies, whose stocks have fallen this year amid the blacklisting effort, have argued they aren’t a national security threat and are focused on health innovation. Complete Genomics has said the bill would bolster the already dominant market share of U.S. rival Illumina Inc., and said it sells DNA sequencing machines but does not collect or access genetic data, which is controlled by their clients.

One prominent Democrat, Representative Jim McGovern of Massachusetts, has asked his colleagues to sink the bill, sending a letter arguing it picks companies to punish with no clear standard and should be reworked.

“In the United States of America, Congress does not just pick companies to punish at random with no clear criteria or due process,” wrote McGovern, who also opposed the TikTok measure. He pointed out that his own work against the Chinese regime led Beijing to sanction him last month and forbid him from entering the country.

Complete Genomics announced in May it’s opening a lab in Massachusetts’ high-tech corridor, near McGovern’s district. And China-based WuXi Biologics announced in January it is expanding a facility in his district, which is expected to add 200 new jobs.

McGovern said on the House floor Monday he would be prepared to shut down companies, even the one in his district, if there was evidence of bad behavior.

“This is how they do things in China. The PRC officials decide they don’t like you — so they blackball you,” he said of the legislation.

Republican Brad Wenstrup of Ohio, the bill’s primary sponsor, said the companies were named because they are aligned with the Chinese Communist Party, which is intent on dominating the biotech industry, and said millions of Americans’ data is potentially at risk.

Speaker Mike Johnson previewed the vote in a speech in July, arguing that business relationships with Chinese biotech companies would leave federal contractors “beholden” to a U.S. adversary and “endanger Americans’ health care data.”

The legislation also has implications for the global pharmaceutical industry, as much of the world’s drug supply chain includes active ingredients produced by Chinese biotechnology companies.

Companies and researchers that receive U.S. funding could continue using the Chinese companies’ products, like Complete Genomics’ DNA sequencing machines, until 2032 under existing contracts via a grandfather clause.

Rand Paul, a libertarian-minded Kentucky Republican who was the sole vote against a Senate version of the biosecurity bill in committee, told Bloomberg in July he’d block quick passage of the legislation.

“I think it’s a mistake to let hysteria over China stop international trade,” he said, warning that “trade isolationism” could lead to war.

But Paul’s resistance may not be enough to sink the bill entirely. Senators are discussing adding the legislation to the chamber’s annual defense policy bill.

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