China, Public Health, International Relations And Biotechnology – Analysis

The announcement by Dr. He Jiankui on YouTube that he used CRISPR-Cas9, a gene-editing technology, to edit the genes of twins was a timely reminder of China’s role in shaping the biotechnology sector – the use of biological processes, organisms, or systems to manufacture products aimed at improving the quality of human life.

The Chinese government recognises the link between economics, national security, health, and international relations. By its very definition, biotechnology is vital to one’s national security (protecting one’s citizens from harm) but also biotech has huge potential in terms of helping the economy. 

The Chinese government’s investment in the field is expected to exceed 4% of GDP by 2020, with the Chinese government intending to construct between 10 to 20 science parks for biomedicine valued at more than 10 billion yuan (US$1.45 billion). In the early 2010s, China had a very limited presence in the biotechnology space the progress it has made has been phenomenal. The commitment to biotechnology stems from Beijing’s intention to establish China as an innovation hub (the Chinese government has allocated around $100 billion for innovation, while Chinese venture capital and private equity funds have raised around $45 billion and invested around $12 billion between 2015 and 2017 in biotechnology). This commitment supported by such programs as the Thousand Talents Plan and Made in China 2025 has allowed innovation to blossom (the State Intellectual Property Office (SIPO) has seen more than 50,000 biotech patents being submitted in 2017 alone).

The CCP sees biotechnology as central in helping China address its massive health needs (in 2009, the CCP established a universal health insurance system and a health service delivery system covering the whole country). COVID-19 has underlined the poor health of many Chinese, as many Chinese smoke (over 300 million smoke, and annually 800,000 Chinese develop lung cancer). Many Chinese live in polluted cities extracting a heavy toll on their health, as seen with the high level of Chinese with respiratory  problems (it is estimated that around 30 million Chinese have asthma, with only 28% managing their condition). 

The COVID-19 outbreak explains why interest in biotechnology rocked as many believe that technology could expedite the discovery of a vaccine. This has led some biotech companies to see their shares substantially rise, leading Jiangsu Bioperfectus Technologies, for example, calling on investors to be more prudent.

Health is an important feature in the Belt and Road Initiative (BRI), with Beijing providing medical assistance and emergency medical aid to countries that sign up to BRI. This has continued during the COVID-19 crisis, with China providing masks and other equipment to key states such as Italy and Ethiopia. China has also agreed to carry out regional cooperation and coordination in maternal and child health, the management of major infectious diseases, and it has provided Chinese traditional medicine treatment to around 20,000 people. It is also building the Hainan Boao Lecheng International Medical Tourism Pilot Zone, designed to provide comprehensive medical services to Chinese and foreigners.

In 2010, a year before hosting the first meeting of the BRIC countries health ministers, China adopted the good drug manufacturing practice standards as laid out by the World Health Organization. In doing so, China was able to expand its presence in the global market of drug manufacturing (in 2017, China was the world’s second largest pharmaceutical market valued at over $570 billion and is expected to grow to $1 trillion to 2020). Another indication as to the growth and the internationalisation of the sector and China’s increasing dominance is that in 2017, the US Food and Drug Administration approved 38 generic drugs made in China (in 2016, it had approved 22).

Biotechnology in China is bifurcated along two lines: the pharmaceutical (drug) sector and Medical AI (one can also find biotechnology in food and agriculture). 

When it comes to Medical AI, the Chinese use it for the pre-clinical treatment stage which means carrying out auxiliary diagnoses, medical imaging, virtual assistant, etc. Medical AI is also used for treatment, including the development and testing of old and new drugs. The third area for Medical AI in China is post-treatment and recovery. The Medical AI in China in 2017 was valued at around $2.6 billion. 

On the drug side, the Chinese have forged ahead in clinical trials carrying for example 116 chimeric antigen receptor cell therapy (Car-T), which essentially is a cell manipulation technique through which immune cells are re-engineered in a lab to attack cancer cells. There are 96 trials in the US and 15 in Europe (in 2010, the Chinese had zero trials). China has been able to do this because it revised cumbersome rules, encouraging US companies to view China more favourably when thinking about running such trials.

Engagement in Car-T is surging because cancer is proving to be a major killer in China (around 4 million patients annually and around 3 million deaths from the disease) and because the country lacks enough medical practitioners such as oncologists (in 2017 there were around 29,000). 

China’s biotech craze has meant that Chinese investors are looking for opportunities everywhere. In the first six months of 2018, US-based biotech companies have seen over US$4 billion worth of investment being poured into their cash-starved sector. The Chinese are either buying the companies upfront or signing licencing agreements to permit them to run clinical trials in China (in 2018 such agreements were valued at over $30 million up from $1 million or $5 million three years ago).

China recognising the potential and value of the Australian biotech sector (for the past three years Australia has ranked in the top five globally for biotechnology) has invested in it. An important component in this relationship is the founding of the Australia China Technology Incubator (ACTI) and the Australia-China Biotechnology Innovation Center, located in Melbourne. The ACTI works in cooperation with the Chinese life science incubator, Joyin Innovation and Manufacturing Centre (JIMC). In 2018, the two signed a MedTech incubator deal aimed at promoting further biotech projects between the two countries. The Centre focuses on ‘establishing, expanding, enhancing and refining Victoria’s connection to China.’ The Centre is supported by ASTIA Capital which helped to facilitate ‘an exclusive Strategic Cooperation Framework Agreement with the management committee of Mianyang Science and Technology City Science Education and Innovation Zone (Mianyang Innovation Zone) to connect the Victorian biotechnology project to Sichuan Province and Southwest Region.’ Mianyang, known as the ‘Western Silicon Valley of China’ as well as being a leading player in civil-military integration is home to 18 Chinese national research institutions, including several national laboratories, national engineering technology research centres, academicians of the Chinese Academy of Sciences and Chinese Academy of Engineering and 321 CMI enterprises in 2017, valued at 150 billion yuan ($21 billion).

Because China believes that the only way to assure its security is through paramountcy, we must pay greater attention to what China is doing in this space and recognise the national security implications that come with Chinese puissance of the sector.

*Isaac Kfir is an adjunct professor at Charles Sturt University, a member of the advisory board of The International Institute for Justice and the Rule of Law, University of Malta, and independent consultant.