China’s Biotech Investors Have Caught a Chill
With the U.S. restricting foreign deals, a once-promising area for investment is now in peril.
Four years ago, President Xi Jinping’s government rolled out the Made in China 2025 strategy to dominate the global economy with its homegrown technology. Chinese government-backed venture capital firms that still wanted to buy U.S. assets identified health care as a sector they could invest in without running afoul of regulators at home.
Cut to 2018, when health and biotech supplanted real estate and entertainment as the top recipients of Chinese capital in the U.S., according to a report commissioned by the U.S.-China Economic and Security Review Commission. Now, however, investors face pressure from regulators in America. The Committee on Foreign Investment in the United States, known as CFIUS, which screens foreign takeovers of domestic assets for national security risks, has become a lot more stringent under the Trump administration. At the end of last year it began vetting even the purchase of minority stakes in critical technology—including biotechnology.