Impact of US House Bill on Chinese Biotech Companies: Wuxi AppTec and Wuxi Biologics

The Legislative Landscape for Chinese Biotechs

The US House of Representatives has approved a bill aimed at Chinese biotech companies, particularly targeting Wuxi AppTec and Wuxi Biologics. The implications of this legislation could be transformative for these companies and affect their operations in the US marketplace.

Market Reactions

• Wuxi AppTec: Shares dropped dramatically by 10% in Hong Kong, closing at HK$32.20.
• Wuxi Biologics: Experienced a 3.9% decline, finishing at HK$10.90.
• The Hang Seng Index managed a slight increase of 0.2%, contrasting with the downturn of these companies.

Legislative Intentions

The bill, if passed by the Senate and signed into law by President Joe Biden, aims to prohibit federal contracts with targeted firms, including Wuxi AppTec, Wuxi Biologics, and BGI Group. This move is designed to diminish reliance on Chinese firms for critical health data and manufacturing processes.

Company Responses

Both Wuxi AppTec and Wuxi Biologics have responded to the news, denying any security threats posed to the US and asserting their commitment to compliance with local regulations. They are actively monitoring the legislative progress and engaging with stakeholders to advocate for their interests.

Implications for Chinese Biotech

Chinese biotech firms find themselves amid escalating tensions, particularly in regard to AI chips and other technologies. The Biden administration, alongside allied nations, has consistently sought to limit cutting-edge product exports to China, increasing the stakes for these companies.

Conclusion

As this legislative effort unfolds, the significant market actions taken against Wuxi AppTec and Wuxi Biologics signal a broader trend that may redefine the dynamics of US-Chinese business relations in biotechnology.