US proposes curbs on investment in Chinese biotech firms

[NEW YORK] The Trump administration is seeking to restrict American investment in Chinese biotechnology companies, potentially complicating financial ties at a time when US drugmakers are increasingly turning to China for new medicines.

The US Treasury Department on Thursday (Oct 22) proposed adding biotechnology to a list of sensitive technologies subject to restrictions on American investment in foreign adversaries, citing national security concerns.

The proposed regulations would require American investors to notify the government about certain transactions involving foreign companies developing sensitive technologies and prohibit others entirely.

The rules would expand an existing programme targeting investments in areas including artificial intelligence, semiconductors and quantum computing.

Chinese biotechnology companies have become a source of innovation for the pharmaceutical industry. US drugmakers are increasingly turning to China to license promising treatments as they search for new products to replenish their pipelines.

The proposed regulations would also restrict investment in Chinese brain-computer interface companies, a growing field of startups that aim to build technologies that allow people to control electronics directly with their brains.

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China and the US both have burgeoning brain tech industries, with startups racing to develop implants, helmets and other devices.

The restrictions could complicate investments in Chinese biotechnology companies, though their impact on pharmaceutical partnerships remains unclear.

The Treasury Department is seeking public comments before issuing a final rule. The restrictions will not take effect until that process is complete. BLOOMBERG