Findings

The Congress finds the following: (1) China has pursued a deliberate, state-directed strategy to dominate global biotechnology, including pharmaceutical development, biologics manufacturing, and clinical research and development capabilities. (2) United States capital flowing to Chinese biotechnology companies through licensing agreements, joint ventures, and equity investments is accelerating China’s acquisition of pharmaceutical intellectual property and clinical development capabilities in a manner that creates strategic dependency risks for the United States. (3) Cross-border out-licensing transactions between United States and European pharmaceutical companies and Chinese biotechnology firms totaled approximately $136,000,000,000 in 2025, representing a rapid and accelerating transfer of pharmaceutical innovation capacity to entities subject to the direction and control of the People’s Republic of China. (4) Biotechnology, including pharmaceutical development and biologics manufacturing, has civil-military dual-use applications and presents strategic dependency risks for the United States comparable to those presented by semiconductors, artificial intelligence, and other technologies already covered under title VIII of the Defense Production Act of 1950. (5) The BIOSECURE Act, enacted as part of the National Defense Authorization Act for Fiscal Year 2026, recognized that biotechnology is both a national security asset and a strategic vulnerability, and that the People’s Republic of China seeks to dominate biotechnology as an industry of the future. (6) Consistent application of outbound investment screening to biotechnology is necessary to prevent United States capital and intellectual property from accelerating China’s dominance of the pharmaceutical innovation supply chain in a manner that will create long-term strategic dependency risks analogous to those the United States now faces in rare earth elements and semiconductors.