China’s growing biotechnology sector is facing increased scrutiny from US policymakers despite continued scientific progress and international collaboration, according to analysis from GlobalData.

The country has emerged as a global biotechnology innovation hub, with Chinese companies increasingly developing advanced therapies and expanding their presence in international clinical research and pharmaceutical manufacturing.

The trend was highlighted at ASCO 2026, where Akeso’s ivonescimab became the first therapy developed from a China-only clinical trial to be presented in a plenary session at the global oncology congress.

The bispecific antibody demonstrated a significant reduction in the risk of death among patients with squamous non-small cell lung cancer, according to data presented at the meeting. The results provided further evidence of the growing international profile of Chinese clinical research and drug development.

However, China’s biotechnology progress is taking place against a backdrop of increasing political and regulatory scrutiny from the USA.

On June 8, the US Department of Defense added contract research, development and manufacturing organisation WuXi AppTec to its 2026 Section 1260H list of “Chinese military companies”. The designation could affect the company’s eligibility for future US government contracts under the BIOSECURE Act.

WuXi AppTec has rejected the designation, calling it “mistaken and baseless”, and is pursuing legal action against the decision. The company has also said there will be no immediate operational disruption and has taken steps to reduce potential future impacts, including the sale of selected assets in the USA and UK.

China biotech innovation gains global recognition

Edita Hamzic, healthcare analyst at GlobalData, said: “China has moved beyond its traditional role as a manufacturing base for generic medicines and is now developing globally competitive advanced therapies.”

She added that the country’s biotechnology development has implications beyond healthcare innovation, including pharmaceutical supply-chain resilience, economic competitiveness and national security.

Despite increasing political scrutiny, cross-border partnerships between Chinese biotechnology companies and international pharmaceutical businesses remain active.

Recent multibillion-dollar licensing agreements between US pharmaceutical companies and Chinese biotech firms demonstrate continued demand for innovative assets emerging from the country’s biotechnology sector.

The trend suggests that geopolitical tensions have not eliminated commercial interest in Chinese drug development, although they may influence how companies structure partnerships, investments and supply chains.

Chinese biopharma companies are also continuing to expand their advanced manufacturing capabilities.

Crystal Pharmatech has launched an OEB4/OEB5 high-potency laboratory in Suzhou to support complex API development, while Proton Pharma has partnered with Hubei Jianxiang Bioscience to establish an integrated peptide development and manufacturing platform.

Zhejiang Jiuzhou Pharmaceutical is also investing in GMP small-molecule manufacturing capacity, with the aim of strengthening supply-chain resilience and production flexibility.

US-China biotech tensions reshape partnerships

The developments highlight the increasingly complex relationship between scientific collaboration, commercial interests and national security considerations in biotechnology.

While Chinese companies are expanding their capabilities across innovative drug development and advanced manufacturing, US policy is placing greater emphasis on the potential strategic implications of Chinese involvement in critical pharmaceutical supply chains.

Hamzic said: “Recent developments highlight how geopolitical tensions affect the biotechnology sector, despite continued scientific progress and international collaboration.”

She added that geopolitical uncertainty was changing the way US-China innovation partnerships are structured but was unlikely to alter China’s long-term position as a major source of biopharmaceutical innovation.

The analysis comes from GlobalData’s Emerging Market Outsourcing Report, which tracks developments affecting contract manufacturing organisations in emerging pharmaceutical markets, including China, India, Latin America, the Middle East and Eastern Europe.

The quarterly report covers contract service agreements, manufacturing inspections, mergers and acquisitions and financing activity across areas including API and dose manufacturing, analytical services and packaging.

The latest developments suggest that China’s biotechnology sector is entering a new phase in which scientific progress is increasingly being assessed alongside geopolitical considerations.

For international pharmaceutical companies, the continued emergence of Chinese biotech innovation could create opportunities for licensing and collaboration, while changing US policy may require businesses to reassess how they manage partnerships, manufacturing networks and supply-chain exposure.