U.S.-China economic and technology competition in the biotechnology, pharmaceuticals, and broader life sciences sector intensified in 2026, after gaining attention in 2025. This sector presents significant national security concerns due to biotechnology's intersection with advanced AI, alongside supply chain vulnerabilities, market access barriers in China, and cross-border data sharing challenges.
Despite these tensions, U.S.-China linkages are growing through licensing deals. However, the risk of industry bifurcation is increasing. The U.S. imposed export controls on biotech equipment in January 2025 and passed the BIOSECURE Act in December 2025 to reduce reliance on Chinese contract development and manufacturing organizations (CDMOs). The Department of Justice also tightened rules on U.S.-origin clinical trial and genomic data transfer to China on April 8, 2025. China retaliated by adding an American medical device company to its Unreliable Entities List, later lifting the import ban. The U.S. remains heavily reliant on China for active pharmaceutical ingredients (APIs) and Key Starting Materials (KSMs), with China being the sole supplier for 41% of KSMs in U.S.-approved APIs. Balancing commercial engagement with mitigating supply chain reliance is crucial.
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